Dow Surges 42.54 To Record High

Stocks climbed to record highs on Thursday for the second time this week, as a surprisingly weak report on first-time jobless claims heightened hopes that the Federal Reserve would soon lower interest rates.

The market was also pushed higher as investment managers bought heavily to add stocks to their portfolios before the quarter’s end.

The Dow Jones industrial average surged up 42.54 points to 4,589.64, well above its previous closing record of 4,553.68 made Monday. Advancing issues led decliners on the New York Stock Exchange by better than 2 to 1. Big Board volume was heavy at 420.96 million shares as of 4 p.m., up from 398.21 million on Wednesday.

Stocks followed the bond market higher from the opening bell, after the Labor Department said jobless claims rose 20,000 to 395,000 in the week ending June 17, the highest level in a year and a half. The 30-year Treasury bond was up more than a point late in the day. Its yield, which falls when prices rise, stood at 6.45 percent, a 16-month low.

“The specific reason it’s running is bonds, and the specific reason bonds are running is unemployment claims,” said Larry Wachtel, a market analyst at Prudential Securities. “The bonds are smelling accommodation by the Fed, and it’s just a debate of when,” he said

Some of the stocks that moved substantially Thursday:

NYSE

IBM rose 5/8 to 97 3/4.

Motorola rose 1 3/4 to 67.

Advanced Micro Devices rose 1 3/8 to 36 3/4.

Storage Technology rose 1 3/8 to 26 3/4.

Technology stocks continued their weeks-long rally, as investors added high performers to their portfolio ahead of the end of the quarter.

Sprint rose 1/4 to 34 7/8.

The company agreed to a $4.1 billion joint venture agreement with Deutsche Telekom and France Telecom to provide telecommunications services around the world.

NASDAQ

Intel rose 1 19-32 to 65 1/4.

Lotus Development rose 15-16 to 63 3/4.

3Com Corp. rose 1 1/2 to 67 3/8.

Microsoft rose 1 1/4 to 91 3/4.

Computer stocks rose as investors bought them to add to portfolios before the end of the quarter.

Broderbund Software rose 3 1/4 to 60.

The children’s software maker surpassed earnings expectations for the third quarter, ending several weeks of fears about weak results. The Novato, Calif., company posted third-quarter net income of 33 cents per share, compared with 18 cents of operating income a year ago.