Blue Chips Set Another Record; Broad Market Mixed

Blue-chip stocks mounted a late rebound Tuesday, notching more record highs and leaving the Dow Jones industrial average just 250 points shy of the 9,000 mark, after a well-known stock guru raised her forecast for the market.

But turmoil roiled the commodities market, where oil prices plunged to their lowest level since 1988.

The broad market was mixed, with smaller-company shares halting a string of new highs and technology issues sagging amid more signs of profit pressures in the computer industry.

The Dow wiped out an early 35-point loss before rising 31.14 points to 8,749.99, the second straight record close for the blue-chip barometer.

The Standard & Poor’s 500 index also turned higher over the final hour of trading, notching a record high for the fifth time in six sessions. It was up 1.18 points to 1,080.45.

But selling in technology stocks, triggered by a steeper-than-expected loss at chip maker Micron Technology, clipped the Nasdaq composite index, which lost 8.88 points to close at 1,779.30. Micron closed down $1.88 at $32.

Declining issues outnumbered advancers by a narrow margin on the New York Stock Exchange, where volume totaled 680.96 million shares.

The NYSE composite index rose 1.15 points to 563.09, also closing at a new high for the fifth time in six sessions. The Russell 2,000 index fell 0.66 point to 471.10, snapping a four-session string of record highs.

Bond prices fell for the second time in three days after economic reports gave mixed signals about the economy’s strength. The benchmark 30-year Treasury bond fell, pushing its yield up to 5.89% from 5.86% on Monday.

There was little reaction to two new reports offering mixed economic signals. The government said construction of homes and apartments, propelled by low mortgage rates and good weather, jumped 6% in February to the highest level in more than a decade. Industrial production, however, was unchanged in February, the first month without an increase since October 1996.

But some stocks got a boost after Abby Joseph Cohen, co-head of Goldman Sachs & Co.’s investment policy committee, raised her prediction for the Dow Jones industrial average’s rise to 9,300 from 8,700, indicating she expects stocks to gain at least 17% this year. The Dow already is up 10.8% after doubling in the last three years. The Dow closed above 8,700 for the first time Monday.

“We believe that the rise in U.S. stock prices has been supported in large part by solid fundamental performance of U.S. companies,” she wrote in a note to clients. “This is expected to continue through 1999 and encourages us to upwardly revise our price targets.”

Cohen also raised her target for the Standard & Poor’s 500 to 1,150 from 1,075 and lifted her forecast for the Nasdaq composite to 1,900 from 1,776.

Cohen proved her mettle most recently on the morning of Oct. 28, the day after the Dow plunged 7.2%. She recommended that clients increase their exposure to stocks and called the mini-crash the day before more “a market event than an economic event.” Since her call, the Dow is up 22%.

Among Tuesday’s highlights:

* Airlines gained as cheaper jet fuel pushed the Dow Jones transportation average to a record closing high at 3,636.81, up 13.24 points. UAL, parent of United Airlines, gained 31 cents to $92.94.

But oil and driller issues declined on oil’s price drop. Chevron lost 81 cents to $82.06 and Exxon ended down $1.25 at $62.94. Schlumberger shed $2.69 to $67.13.

* The Dow drew strength from a range of companies: J.P. Morgan surged $5.13 to $135.25, DuPont rose $2 to $66.13, American Express jumped $1.94 to $95.75 and 3M was up $1.94 to $93.31.

* In the technology sector, Intel fell $1.06 to $76.63, and Microsoft dropped $1.63 to $80.38. Compaq Computer fell $1.88 to $23.63.

* Independence Community Bank topped the most-active Nasdaq list, rising $7.25 to $17.25 on the bank’s first trading day after completing its conversion to stock from mutual form of ownership.

Market Roundup, D8