Euro Surges to Record High as Pressure on Dollar Persists
Stocks closed broadly higher Wednesday on some positive economic reports as the market again showed little concern about the tumbling dollar and shook off another rise in crude oil prices.
The Dow Jones industrial average added 27.71 points, or 0.3%, to 10,520.31, but the market overall was stronger than the 30-stock Dow.
The technology-heavy Nasdaq composite jumped 18.26 points, or 0.9%, to 2,102.54, nearing the 10-month closing high of 2,104.28 reached a week ago.
The Standard & Poor’s 500 index was up 4.82 points, or 0.4%, to 1,181.76.
The Russell 2,000 index of smaller stocks gained 4.97 points, or 0.8%, to a record 629.50, continuing the recent sharp advance in smaller shares.
Although trading was relatively thin ahead of the Thanksgiving holiday, rising stocks outnumbered losers by more than 2 to 1 on the New York Stock Exchange and by more than 3 to 2 on Nasdaq.
In currency trading, the dollar slid to a new low against the euro and gave up more ground against the Japanese yen.
The euro jumped to an all-time high of $1.318 in New York from $1.308 on Tuesday. Just two months ago, the euro was trading at $1.20.
The dollar slumped to 102.81 yen from 103.43 on Tuesday, the lowest level since it hit 102.05 on March 31, 2000.
The greenback’s latest fall follows last weekend’s meeting of finance officials from the Group of 20 industrial and developing countries. The group signaled that it wasn’t poised to try to intervene in currency markets to stop the dollar’s slide.
The sinking dollar is a mixed blessing for the U.S. It helps many American companies by making their goods less expensive overseas. But a weak dollar could discourage foreign investment here.
Federal Reserve Chairman Alan Greenspan warned last week that foreign investors eventually might sour on dollar-denominated assets, including Treasury bonds.
But the bond market wasn’t ruffled by the dollar’s decline Wednesday or by some healthy economic data. The 10-year Treasury note edged up to 4.20% from 4.19% on Tuesday.
The government reported that sales of new homes were better than expected in October, and that new claims for unemployment benefits dropped last week.
A report on October durable goods orders showed a small decline, but the pace of orders in September was revised upward from the initial report.
In other market highlights:
* Near-term crude oil futures rose 50 cents to $49.44 a barrel even though weekly government data showed rising domestic inventories of crude and distillate fuel, which includes heating oil.
Natural gas futures skyrocketed more than 20% as the front-month contract expired and the government reported a decline in inventories that were still bountiful for this time of year.
Traders said the closure of the New York Mercantile Exchange today and Friday might have driven oil and gas prices Wednesday. Traders often bid prices higher before the weekend out of fear of an unexpected supply disruption.
* Internet-related shares advanced after Goldman Sachs said earnings growth at Google, the world’s most-used Internet search engine, would fuel gains in the stock. Google advanced $7.24 to $174.76. Yahoo, owner of the No. 2 Internet search engine, gained $1.21 to $37.61. EBay, the biggest online auctioneer, rose $2.18 to $111.71.
* The housing report helped lift home builders. D.R. Horton, the largest U.S. home builder by stock market value, climbed 44 cents to $36.14. KB Home of Los Angeles added $1.73 to $91.35 and Centex rose 92 cents to $54.19.
* Education companies advanced after DeVry, a provider of postgraduate and undergraduate technology business degrees, said it received a merger inquiry. DeVry adopted a plan that would enable shareholders to buy shares at half-price if notice was given that 15% of the firm was being acquired.
DeVry added $2.77 to $17.67. Career Education increased $1.92 to $39.01 and Santa Ana-based Corinthian Colleges added 93 cents to $17.26. Strayer Education, a provider of adult learning programs, rose $4.67 to $106.42.
* Delta Air Lines led gains in carriers after UBS recommended buying the shares. Delta jumped 43 cents, or 6.6%, to $6.98, the best performance in the S&P; 500.
