No, Dow Not There Yet, but It Hits Record
A wave of late-afternoon buying propelled the Dow Jones industrial average to a record high close Monday, but the index stopped short of the eagerly anticipated 10,000 mark.
The Dow rose 82.42 points, or 0.8%, to 9,958.77, leaving it fewer than 42 points from 10,000. The index of blue-chip stocks, which has flirted with the 10,000 milestone over the last few sessions, came within 30 points Monday before giving up ground.
“The market appears to be tiptoeing toward Dow 10,000,” said Alan Ackerman, veteran analyst at Fahnestock & Co. in New York.
Market watchers were so attuned to 10,000 that the Dow’s new high barely turned heads.
“There was no special spark” for Monday’s buying, said Rao Chalasani, chief investment strategist at Everen Securities in Chicago. “But whatever was helping push the market last week is there again.”
Those factors, analysts say, include low inflation and early hints of strong first-quarter corporate earnings from key companies. Additional momentum Monday came from announcements of several big merger deals.
The $16-billion acquisition of BankBoston by Fleet Financial Group added some punch to the financial services sector. BankBoston gained a mere 13 cents to close at $47.06, and Fleet fell $2.56 to $42.19. But the merger stimulated talk of further consolidation in the sector, and pushed up shares of industry powerhouses such as J.P. Morgan, which rose $3.38 to $125.38, and BankAmerica, up $1.50 to $73.75.
In another major deal, DuPont said it will pay $7.7 billion to acquire 80% of Pioneer Hi-Bred, the world’s largest seed corn company. Dupont, a Dow stock, fell $1.50 to $56.25; Pioneer rose $4.06 to $38.38.
“These big deals are making investors feel very confident,” Chalasani said. “It’s a sign that there is money out there.”
Meanwhile, Internet stocks carried the technology sector higher Monday, outpacing the Dow. The Nasdaq composite index, driven by tech issues, rose 49.91 points, or 2.1%, to close at 2,431.44.
Analysts pointed out that despite the diversity of Monday’s market gainers, the broader market still was lackluster. Advancing issues barely outnumbered decliners on the New York Stock Exchange, and losers dominated on Nasdaq.
“The market has lifted of late thanks to the performance of a handful of stocks,” Ackerman said. “There are many players waiting for the market to broaden, which would allow the smaller companies to reap some of these great gains.”
Still, broad indexes joining the Dow at new highs Monday included the Standard & Poor’s 500, up 1% to 1,307.26, and the NYSE composite, up 0.6% to 615.22.
In the bond market, meanwhile, trading was dull, and yields were mostly unchanged from Friday.
Among Monday’s highlights:
* One of the strongest sectors was the airline industry, thanks to new fare increases. United Airlines parent UAL, which also indicated that its first-quarter earnings will top analysts’ expectations, was the biggest gainer, rising $6.69 to $73.75.
The airline stocks’ robust gains brought the Dow Jones transportation average to its highest close since July. The index rose 137.14 points, or 4.2%, to 3,404.65.
* CMGI, the largest shareholder of No. 3 Internet directory Lycos, surged after the venture fund said other potential buyers are interested in Lycos. CMGI rose $28.63 to $192.63, and Lycos gained $7.13 to $105.75.
Other Internet winners included EBay, up $14.81 to $156.81; Inktomi, up $5.75 to $76.75; and America Online, up $5.88 to a record $102.
* Drug stocks attracted buyers, with Bristol Myers up $2.50 to $65.13 and Lilly up $1.69 to $96.56.
* On the downside, gold stocks fell as the metal sank. Barrick Gold fell 63 cents to $18.06 and ASA lost 44 cents to $17.13.
* Oil stocks were among the decliners after rallying Friday as world oil producers agreed to cut their output. Texaco slipped 81 cents to $54.63 and Mobil fell $1.13 to $91.94.
Near-term crude oil futures in New York slipped 4 cents to $14.45 a barrel, but longer-term contracts rose.
Market Roundup, C12
