S&P; Hits Record; Most Indexes Post Small Gains
The Standard & Poor’s 500 index notched a record high on Friday for the second time in three days, but most stock averages posted only marginal gains as the market turned cautious after rallying earlier in the week.
Bond yields eased while the dollar closed slightly higher against the Japanese yen.
The Dow Jones industrials surrendered most of an early 56-point gain and finished just 8.96 points higher at 8,944.54, extending the week’s gain to 231.67 points, or 2.7%.
The S&P; index rose 3.92 points to 1,133.20, edging past Wednesday’s record high of 1,132.89. For the week it rose 3%.
The Nasdaq composite rose 6.28 points to 1,869.53 on Friday, gaining 5% for the week.
It was the fourth straight winning session for the Dow, but the second day in a row in which it retreated into the close, barely finishing higher.
On the New York Stock Exchange advancing issues outnumbered decliners Friday by only a 6-5 margin in sluggish trading typical of a summer Friday.
Smaller stocks were weaker. The Russell 2,000 index of small issues barely edged up for the day, though for the week it rebounded 2.7%.
“It’s some relief that the market did rally this week, and that has a lot to do with the end of quarter,” said John Mendelson, head of market analysis at Charles Schwab Capital Markets. “It’s not politically correct to have cash” on quarter-end statements to clients.
Still, there was caution among many investors as they eyed the renewed slide in the beleaguered yen this week, to 142.44 yen by Friday in New York.
What’s more, second-quarter corporate earnings reports will begin flowing out in about two weeks. Worries about earnings had slammed many stocks in late May and early June.
Nearer-term, the Federal Reserve meets on Tuesday, though no action on interest rates is expected.
The benchmark 30-year Treasury bond yield finished Friday at 5.63%, down from 5.65% Thursday and 5.66% a week ago.
A possible rescue merger between one of Japan’s largest banks, Sumitomo Trust & Banking, and troubled Long-Term Credit Bank of Japan led to some increased optimism that Japan’s banking crisis may finally be reaching the workout phase.
And Treasury Secretary Robert E. Rubin, accompanying President Clinton on a visit to China, said China has no plans to devalue its yuan, a move the Chinese had been considering as the yen fell.
Among Friday’s highlights:
* Telecom and media stocks continued in the spotlight in the wake of AT&T;’s surprise takeover deal for cable giant Tele-Communications Inc. this week.
But AT&T; continued to slide as investors voiced disapproval over the earnings dilution the deal will mean short-term for AT&T.; The phone giant’s shares lost $1.25 to $56.75. TCI lost 56 cents to $38.69.
Among other cable stocks, Cablevision gained $2.13 to $77.38 and MediaOne rose $1.44 to $44.06. But Time Warner fell $2.06 to $85.
* In the tech arena Adobe Systems fell $1.94 to $42.44 after the No. 1 maker of desktop software for sophisticated graphics said it earned less than expected in its fiscal second quarter.
* Drug stocks were a pocket of strength, with Bristol Myers up $3.50 to $117.50 and Pfizer up $1.44 to $111.94.
Among other blue-chip consumer issues, Coca-Cola hit a new high, up 94 cents to $85.81.
In foreign trading Russian stocks were slammed after the central bank boosted interest rates again to stem capital flight.
That hurt other emerging markets, including Mexico, where the main stock index fell 1.8% to 4,157, and the peso fell to a record low of 9.03 to the dollar.
Market Roundup, D4
