Markets End Week With a Flourish
Stocks rallied and bond yields fell Friday, as investors cheered the news that the eight-year U.S. economic expansion continued at a brisk pace in the final quarter of 1998, yet with low inflation.
The advance left key indexes with gains for the month--historically a signal that the market will rise for the year as well.
The Dow Jones industrial average ended up 77.50 points, or 0.8%, at 9,358.83. For the week it was up 238.16 points, or 2.6%.
The tech-heavy Nasdaq composite index jumped 28.55 points, or 1.1%, to 2,505.89, its second consecutive record close. The index was up 7.1% for the week.
There was good news in the broader market as well: Rising stocks outnumbered losers by 17 to 13 on the New York Stock Exchange and by 23 to 18 on Nasdaq.
Analysts said the economy, which began a peacetime record 93rd month of expansion in December, remained an island of prosperity amid global chaos in Asia, Latin America and Russia.
“This helps confirm that the economy is rock solid, which is great news for the stock market,” said Alan Skrainka, chief market strategist at Edward Jones.
And with key government indexes also showing a lack of inflationary pressures in the fourth quarter, the bond market was happy as well. The benchmark 30-year Treasury bond yield eased to 5.08% from 5.10% on Thursday.
News that Brazil’s currency fell to another record low of 2.1 to the dollar, from 1.95 on Thursday, didn’t faze the U.S. market. Moreover, Brazilian stocks continued to rally, gaining 6.6% before the weekend arrival of an International Monetary Fund team set to rehash terms of its rescue package for the struggling economy.
On Wall Street, the focus was on the “January barometer.” The theory says that “as January goes, so goes the year” for stocks.
With the Dow up 1.9% in January, the Nasdaq index up 14.3% and the Standard & Poor’s 500 up 4.1%, the bulls naturally are enthused: The barometer has been correct 94% of the time over the last 48 years, according to Hugh Johnson, chief investment officer at First Albany Corp.
Even the small-stock Russell 2,000 index rose for the month, inching up 1.3%.
Among Friday’s highlights:
* Computer makers gained after Dataquest said personal computer shipments rose a greater-than-expected 15% last year. IBM jumped $4.56 to $183.25, Hewlett-Packard climbed $4.50 to $78.38 and Dell jumped $5.81 to a record $100.
* Internet stocks were mixed, with Yahoo falling $13.50 to $354.25 while America Online rose $1.94 to $175.75
Tut Systems rocketed $39.50 to $57.50 in its first day of trading. The Pleasant Hill, Calif., company designs products that provide high-speed access to the Internet over phone wires.
* Amgen surged $8.25 to $127.81 after the world’s largest biotechnology company reported earnings above estimates and announced a 2-for-1 stock split.
But Hershey Foods plunged $7.69 to $56.25 after the biggest U.S. candy company said fourth-quarter profit dropped 5.3%.
* Depressed airline stocks rallied after Northwest matched a fare increase by its major rivals. Northwest gained $4.13 to $27.38, Continental Airlines jumped $3.38 to $34 and Delta surged $4.44 to $54.56.
* Shop at Home rose $5.25 to $17.13 after the third-largest U.S. home-shopping specialty retailer said it would consider an acquisition offer.
Market Roundup, C4
