Dow Recoups Loss, Hits New High
Stocks erased early losses to move to new heights Thursday, as enthusiasm about lower interest rates banished fears of an economic slowdown.
The Dow Jones industrial average ended 7.61 points higher at 4,472.75, having climbed back from a morning loss of 28 points and setting a record for the 33rd time this year.
Advancing issues outnumbered decliners by more than 4 to 3 on the New York Stock Exchange, with 1,267 up, 936 down and 800 unchanged. Big Board volume was moderately heavy at 345.91 million shares as of 4 p.m., down from 358.16 million Wednesday.
In economic news, the National Association of Purchasing Management said its May index of manufacturing activity slowed to 46.1 percent from 52 percent in April. A reading below 50 means a decline in factory activity - the first after 20 straight months of expansion.
Stocks dropped immediately after the report was released.
But the very information that sent stocks tumbling supported the bond market. The 30-year Treasury bond was up 9-16 point late in the day. Its yield, which falls when prices rise, dropped to 6.60 percent from 6.64 percent on Wednesday.
In the end, the prospect of a sustained period of lower rates proved more important to stock investors than potential problems with the economy.
Some of the stocks that moved substantially Thursday:
Micron Technology, up 1 3/4 at 46 3/8.
IBM, up 1 1/4 at 94 1/4.
Digital Equipment, up 1 1/4 at 45 3/4.
Motorola, up 1 1/4 at 61 1/8.
Computer stocks rallied after falling sharply on Wednesday.
Westinghouse Electric, up 3/8 at 14 7/8.
The company is in discussions to sell its real estate unit, The Wall Street Journal reports.
Texas Instruments rose 5 5/8 to 121.
Brown Brothers Harriman began coverage of the electronics maker with a short-term “buy” rating.
Intel, up 2 1/2 at 114 3/4.
Novell, up 1/8 at 19 7-16.
Cisco Systems, up 1 3-16 at 44 15-16.
Oracle Corp., up 7/8 at 35 5/8.
3Com, up 1 15-16 at 65 15-16.
Computer stocks rallied after losing ground Wednesday on profit-taking.
Ivax Corp., up 5/8 at 26 3/8.
The Food and Drug Administration cleared the company’s request to sell Flurbiprofen tablets, a generic arthritis drug, in 50 mg and 100 mg dosages.
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