Dow Surges to Its First Close Above 9,600
A two-week buying party on Wall Street continued Friday, pushing the Dow Jones industrial average to its second record of the year.
But the rally didn’t go far below the blue chips.
“The market’s up 100 points, but there are probably as many red numbers on my screen as there are green,” said James Meyers, market strategist at Janney Montgomery Scott Inc. in Philadelphia, referring to the number of losing stocks versus winning.
The Dow Jones industrial average notched its first close above 9,600, rising 105.56 points, or 1.1%, to 9,643.32. The broader Standard & Poor’s 500-stock index gained 5.36 points, or 0.4%, to 1,275.09. The Nasdaq composite rose 18.32 points, or 0.8%, to 2,344.41. All three closed at records, though declining shares were about matched with advancers on the New York Stock Exchange.
“People were predicting a pretty slow economy in 1999,” said Robert Freedman, executive vice president of John Hancock Funds. “Now money managers think earnings will be better than expected, and they’re nervous about not having money in the market when it’s moving up.”
Bond prices fell, pushing yields to a seven-week high, after the government reported that the employment rate fell to a 28-year low, snuffing expectations for more Federal Reserve interest rate cuts. The yield on the benchmark 30-year Treasury bond rose to 5.27% from 5.22% on Thursday.
In currency trading, the dollar closed at 110.93 Japanese yen, down 0.11; the euro closed at $1.155, off 0.012.
Internet-related stocks flew high in one of their wildest sessions yet. Amazon.com Inc. swung between $152 and $199.13 before closing at $160.25, up $1.38. Lycos Inc. soared $20.25 to $91.75, after the chief executive of the search directory said the company will surpass Yahoo in the number of Internet users visiting its Web site.
About 934 million shares changed hands on the NYSE, the ninth-busiest day ever on the world’s largest exchange. On Nasdaq, 1.2 billion shares traded, making Friday the fifth-busiest day.
For the year’s first week, the Dow rose 5%, the S&P; 500 gained 3.7%, the Nasdaq composite climbed 6.9% and the Russell 2,000 index of smaller stocks advanced 2.2%.
Among Friday’s highlights:
* Lehman Bros. Holdings jumped $5.75 to $59.88, after a Merrill Lynch analyst boosted his recommendation on the company, one day after a report showing stronger-than-expected fourth-quarter earnings.
* RealNetworks, which makes software that lets companies air programs via the Internet, rose $9.50 to $50, after reporting that its software has 43 million registered users, up from 14.4 million a year ago. Data Broadcasting gained $6.50 to $26.38, ahead of an initial public offering of its part-owned MarketWatch.com Internet unit.
* Dow component Alcoa climbed $7.88 to $85.13, after the world’s biggest aluminum producer said fourth-quarter earnings rose 23%. The company said it will split its stock 2 for 1 and boost its quarterly dividend 50%.
* General Motors and Ford Motor shares surged. GM, the world’s biggest auto maker, told analysts that higher truck production could add $400 million in profit for 1999. Its shares rose $2.50 to $80.06. Ford, the No. 2 auto maker, gained $3.19 to $65.
* AT&T; rose $2.81 to $85.06 on confidence that Chief Executive C. Michael Armstrong is seeking to reduce the company’s dependence on the consumer long-distance business and move into fast-growing wireless, data and video services.
* Investors sold consumer shares in favor of more cyclical issues. Eli Lilly dropped $3.50 to $78.88, Coca-Cola fell $1.44 to $68 and Procter & Gamble lost $1.69 to $89.19.
In foreign markets, the Nikkei- 225 index in Tokyo fell 1.1%, the DAX in Frankfurt rose 1.3%, the FTSE-100 in London gained 0.8% and the CAC in Paris added 0.4%.
Market Roundup, C4
* MARKET SWINGS
Traders will meet Monday to discuss ways to reduce Nasdaq volatility. C3
