Late Rally Drives Dow To Fifth-Straight Record

The Dow industrial average lurched into record territory Tuesday, reaching its fifth straight all-time high with help from a late rally in technology shares that reversed a broad retreat.

The Dow industrials, at one point down by more than 37 points, recovered to close up 7.22 at 5,078.10. It was the 64th record close in 1995 for the stock market’s best known indicator.

“The technology stocks were our guiding light today,” said Alfred E. Goldman, vice president at A.G. Edwards & Sons Inc. in St. Louis. “The big lift in the tech sector helped revive the whole market.”

Advancing issues led decliners by 6 to 5 on the New York Stock Exchange, where volume totaled 408.87 million shares as of 4 p.m., vs. 356.18 million on Monday.

Stock prices sagged for most of the day, weighed down as investors sold stocks to cash in on the historic rally.

But computer-driven buying in the late afternoon and a surge in technology shares helped fuel the turnaround and thrust the market back to record levels.

Some of the stocks moving substantially or trading heavily Tuesday:

NYSE

Baxter International, up 2-7/8 at 41-3/8.

The world’s largest hospital supply company announced plans to split into two $5 billion entities - a global medical technology company and a health care cost management company.

Disney, down 1-3/8 at 61-1/2.

The Burbank, Calif.-based entertainment company reported fourth-quarter earnings of 50 cents a share, compared to 42 cents per share a year ago. While the earnings were on target with analysts’ estimates, Merrill Lynch and Smith Barney downgraded the company Tuesday.

Albertson’s, down 3/4 at 31-1/4.

Smith Barney and Prudential Securities reportedly downgraded the Boise, Idaho-based food and drug chain. The lower rating came despite Albertson’s earning’s report Monday at 42 cents a share for the third quarter, up from 37 cents a share a year ago and in line with analysts’ estimates.

NASDAQ

Flow International, down 2 at 8-1/2.

The Kent, Wash.-based maker of waterjet cutting and cleaning systems reported second-quarter earnings of 12 cents a share, down from 15 cents a share last year and below analysts’ estimates.

AMEX

TWA, up 5/16 at 9-7/8.

CNBC financial correspondent Dan Dorfman reported that George Putnam, editor of The Turnaround Letter in Boston, said the carrier has “the wherewithal to survive, it has a lot going for it.”