Holiday Week Ends Festively For Stock Market

The Fed’s interest rate moves propelled the stock market sharply higher this past week.

The Dow Jones industrial average crossed both the 4,600 and 4,700 milestones, closing at a record high 4,702.73 Friday, a gain of 38.73 for the day and 146.63 for the week.

Cyclical blue chips, common in the Dow, fared well in the rally, but other market indicators also ended the week at record levels.

The S&P 500-stock composite index rose 2.38 Friday to 556.37, an increase of 11.62 for the week. The Nasdaq composite picked up 16.83 Friday, closing at 969.76 for a weekly gain of 36.31.

The New York Stock Exchange’s composite index rose 1.28 Friday to 297.71, up 5.87 for the week. And on the American Stock Exchange, the market value index rose 1.69 Friday to 505.20, up 5.01 for the week.

The Wilshire Associates Equity Index, the market value of NYSE, American, and Nasdaq issues, ended the week at $5.472 trillion, up $122.959 billion from a week earlier. A year ago the index was $4.440 trillion.

The dollar also rallied, gaining against most major currencies Friday and touching a six-week high against the Japanese yen after a surprise intervention by the Federal Reserve and the Bank of Japan.

Foreign-exchange traders were shocked by the coordinated move, which followed the Fed’s decision Thursday to cut short-term interest rates for the first time in three years.

Analysts said there was a danger the lower rates could hurt the dollar’s recent rally, since currencies draw strength from higher interest rates. The central banks likely acted to reassure currency traders.

“The intervention was a huge surprise,” said David Gilmore, a partner at Foreign Exchange Analytics in New York. “It’s unusual for the Fed to move in when the dollar isn’t sliding.”

In late New York trading, the dollar was quoted at 86.80 yen, up from 85.04 late Thursday. It reached 86.97 yen in intraday trading, its highest level since May 25.

The dollar was also changing hands at 1.3930 German marks, up from 1.3790.

Some of the stocks that moved substantially or traded heavily Friday:

NYSE

IBM up 5/8 at 99-1/2.

The stock, which traded at $54 less than a year ago, crossed 100 mark for first time in nearly three years before backing off.

Union Carbide up 2-1/2 at 36-3/4.

The chemical company and other cyclical stocks benefited from perceptions that the economy will avoid recession.

Aluminum Company of America up 1-1/2 at 56.

The mining company reported second quarter earnings of $1.23 per share, up from 25 cents a year earlier.

Sensormatic down 12-3/8 at 23.

The electronics company said it expects fourthquarter net income to be substantially below expectations.

NASDAQ

Intel up 2 13-16 at 68-1/4.

Microsoft up 2-7/8 at 95-5/8.

Both stocks benefited from a surge in technology issues.

Artisoft up 2-5/8 at 11.

Bear Stearns started coverage with a buy rating.