Dow Up 57.55, S&P; Hits New High as Bond Yields Slide
Stocks extended a month-end rally Thursday, with the Standard & Poor’s 500 index setting a record high and the Dow Jones industrial average briefly moving above 8,000 for the first time since early January.
The Dow rose 57.55 to 7,973.02 after swinging from an early 32-point loss to a gain of nearly 100 points before pulling back. The blue-chip barometer, up about 275 points this week, hasn’t closed above 8,000 since Dec. 9 and still sits nearly 300 points from its Aug. 6 peak of 8,259.31.
The S&P; 500, which came within 8 points of its first foray above 1,000, finished 8.03 higher at 985.49, surpassing its Dec. 5 record close of 983.79. Advancers outnumbered decliners by a nearly 2-1 margin on the New York Stock Exchange, where more than 754.46 million shares were traded, the fourth-biggest tally ever.
Bolstered in recent days by strong profit reports and a calmer perception of the crises in Asia and Washington, stocks drew an additional boost Thursday from the bond market, where interest rates sank sharply as Federal Reserve Board Chairman Alan Greenspan delivered a scheduled report on Capitol Hill.
Greenspan, speaking before the Senate Budget Committee, stuck to his recent emphasis on the Asian economic crisis and its deflationary impact rather than focusing on a worrisome report earlier this week on rising employment costs--the leading force behind inflation.
The yield on the benchmark 30-year Treasury bond fell to 5.84% from 5.94% on Wednesday.
With just one January session to go, the S&P; 500 and the Dow have wiped out the remnants of a loss that had exceeded 4% and have moved into positive territory for a month that has frequently foretold the market’s course for the entire year.
In another encouraging sign, the gains of the last few days have come on heavy volume and across many sectors, indicating that the market may be breaking out of the doldrums that have stifled almost every rally since the Asian crisis became front-page news in late October.
“To have heavy volume and prices going higher means that there are lots of participants and people are willing to pay up for stocks. That’s what makes rallies go,” said Richard A. Dickson, a technical analyst at Scott & Stringfellow in Richmond, Va.
“I’m kind of surprised. I didn’t think the market had this in it--the way it’s not been doing much all month, the way it hasn’t been able to sustain a rally--but it sure has,” said Dickson, suggesting that the sudden advance may “pull in people who’ve been waiting for a bear market or waiting for a pullback.”
Among Thursday’s highlights:
* Tech stocks rallied broadly. Intel rose $1.13 to $82, Cisco Systems gained $1.88 to $63.75, Oracle climbed $1.16 to $22.34, Dell Computer rose $1.50 to $98.63 and Computer Associates rose $1.88 to $54.13.
* Callaway Golf fell $3.19 to $27.13 after the maker of Big Bertha golf clubs earned 34 cents a diluted share in the fourth quarter, below the 37 cents analysts had forecast.
* Safeway rose 94 cents to $65.81 after the food and drug retailer said fourth-quarter earnings rose a better-than-expected 42%, aided by its Vons purchase. Safeway also declared a 2-for-1 stock split.
Overseas, Tokyo’s Nikkei stock average rose 0.2%, Frankfurt’s DAX index rose 0.6% and London’s FTSE-100 rose 0.9%. Several Asian markets were closed for lunar new year celebrations.
Market Roundup, D6
