Stocks climbed to record highs Wednesday amid mounting consensus that the economy can grow at a steady rate without inflation, pushing the Dow Jones industrial average within a few points of 4,000.
The best-known measurement of the stock market retreated from its highest levels late in the day, closing 27.92 points higher at 3,986.17. Still, that shattered the all-time record of 3,978.36 set on Jan. 31, 1994.
In an indication of broad strength, the Standard & Poor’s 500 index added 1.99 to 484.54, breaking Tuesday’s record high of 482.55.
The rally began in earnest after the Federal Reserve reported a downturn in the nation’s manufacturing activity. The central bank said industrial production climbed 0.4 percent last month, down from a revised growth of 0.9 percent in December.
That led analysts to hope that inflation was waning and that the Federal Reserve would find it unnecessary to further tighten shortterm interest rates.
Advancing issues had a lead of nearly 2 to 1 on the New York Stock Exchange. Big Board volume was heavy at 377.94 million shares as of 4 p.m., up from 300.71 million on Tuesday.
Some of the stocks that moved substantially or traded heavily Wednesday:
Ford Motor unchanged at 26 1/8.
General Motors rose 7/8 to 41 3/8.
Chrysler rose 5/8 to 46 3/8.
Auto stocks gained, along with other economically sensitive issues, as investors anticipated moderate economic growth with low inflation.
Piper Jaffray rose 1 5/8 to 12 3/4.
The brokerage firm will pay $70 million to investors to settle a lawsuit alleging the firm misrepresented a bond fund. The settlement was less than had been expected.
Microsoft fell 1 1/8 to 60 3/4.
A federal judge overturned the software company’s antitrust settlement with the Justice Department, raising the possibility of more stringent action against the company.
Nextel Communications rose 1 to 12 7/8.
The firm said it had hired Donaldson, Lufkin & Jenrette Securities to help it win bondholder approval for three acquisitions.
Gaylord Container rose 2 1/8 to 12 3/8.
Container stocks rose amid expectations of firmer prices and growing demand.
ASR Investments rose 1/4 to 1 13-16.
Fourth-quarter earnings were 11 cents per share, compared with a loss of $1.62 a year ago.