Dow Up 88; Broader Indexes Hit Records
Stocks bounced back from the previous day’s losses Tuesday as the market quickly got over an inflation scare stemming from a sharp rise in oil prices.
The Dow Jones industrial average gained 88.19 points to 8,904.44, recouping almost all of the 90.18 points it gave up on Monday. The index of blue-chip stocks remains just shy of the record it set on Friday, when it capped a weeklong, 300-point climb to close at 8,906.43.
In the broad market, the Nasdaq composite index had its first close above 1,800, and the Standard & Poor’s index of 500 stocks finished above 1,100 for the first time.
Bonds were little changed for a second day as the Treasury met ample demand for $14 billion of two-year notes amid optimism for tame inflation and less government borrowing. The benchmark 30-year Treasury bond rose 0.03, or 31 cents per $1,000 bond, to 103.41, leaving its yield at 5.88%.
With no major economic reports issued, investors continued to focus on oil prices, which dipped Tuesday after soaring Monday.
Oil got a lift over the weekend when top petroleum-exporting countries agreed to cut production in an attempt to revive the sluggish energy market. The movement to curb oil output raised fears of renewed inflation and lower corporate profits. But there has been growing skepticism that the cuts won’t be steep enough to significantly reduce the global glut of oil.
The change in attitude affected oil stocks, as Chevron fell $1.44 to $85.44 and Mobil slid $1.25 to $78.13.
Other short-term factors helped push stocks ahead. Mutual funds are making end-of-quarter investments for investors flush with cash after a wave of mortgage refinancing and accelerated tax refunds.
Where stocks go next depends largely on the strength of corporate earnings, analysts said. Many reports covering 1998’s first three months will be out in April, and they will provide clues to how the rest of 1998 is shaping up.
“We’ve still got to get through first-quarter earnings,” said Ted Theodore, director of research at Avatar Associates in New York. “That looks like it’s going to be a little bit rocky.”
Advancing issues outnumbered decliners by about 8 to 7 on the New York Stock Exchange.
Volume on the floor of the Big Board came to 614.25 million shares as of 4 p.m., down from 628.81 million in the previous session.
All but four of the 30 Dow industrial stocks posted gains. Monday’s losers were Tuesday’s gainers, led by Walt Disney, up $3.94 to $106.94; General Electric, up $2.13 to $103.50; and IBM, up $2.13 to $103.50.
The Dow Jones transportation average ended up 23.94 points at 3,530.88. The prospect of higher fuel prices sent the index reeling on Monday.
The S&P; 500 rose 10.10 to 1,105.65, the Nasdaq rose 19.93 to 1,812.44, the NYSE composite index rose 4.42 to 574.96, and the American Stock Exchange composite index rose 3.42 to 738.69--all new highs.
The Russell 2,000, a measure of the performance of smaller companies, rose 2.30 points to 476.26, surpassing its previous record, set Thursday, of 474.25.
Among market highlights:
* Cisco Systems Inc. rose $3.06 to $67.81 after Chief Executive John Chambers said Internet service and voice and data business could comprise half the company’s sales within four years.
* ISS Group Inc., an as-yet-unprofitable computer-network security company, surged $18.38 to $40.38, reflecting continuing investor enthusiasm for Internet-related initial public offerings.
* Union Pacific Corp. rose 50 cents to $54.50. The railroad said it will bar most freight traffic to Mexico in an attempt to ease a yearlong backlog that’s clogged its overburdened rail system.
Overseas, Tokyo’s Nikkei stock average fell 1.6%, Frankfurt’s DAX index rose 1.1% and London’s FT-SE 100 rose 0.6%.
Market Roundup, D10
