Dow Gains 5.42 To Extend Rally

Stocks managed tiny gains Monday, extending a record-setting rally for some indexes.

The Dow Jones industrial average rose 5.42 to 5,573.41, once again trading in a narrow range amid continuing uncertainties about inflation and interest rates as the economy picks up momentum.

The sluggish blue-chip index has been boosted in recent weeks by strong earnings reports and enthusiasm that an improving economy should benefit those sectors most.

That rally slowed some Monday on a pickup in selling to take profits, but the Nasdaq composite index and Russell 2000 list of smaller companies struggled higher to their ninth straight record closes.

Declining issues outnumbered advancers by about 8 to 7 on the New York Stock Exchange, where volume slowed to 342.54 million shares as of 4 p.m., well below Friday’s pace.

Investors have seen mixed signals in the most recent economic reports, so investors are waiting to see the government’s April employment report, to be released Friday.

“People are trying to figure out which way things are going,” said Don Hays, director of investment strategy at Wheat First Butcher Singer in Richmond, Va.

Some of the stocks that moved substantially or traded heavily:

NYSE

Boeing, unchanged at 80-3/4.

The aircraft maker said its profits fell 34 percent in the first quarter of 1996 as aircraft deliveries were slowed by last year’s 69-day machinists strike. Although analysts had expected a drop from Boeing’s results in the first three months of 1995, the latest profit of $119 million, or 35 cents a share, was below many Wall Street estimates. Boeing also raised its quarterly dividend by 12 percent, to 28 cents a share, the first increase since 1990. The new dividend is payable June 7 to stockholders of record on May 17.

Continuum, up 12-1/4 at 57-5/8.

Computer Sciences, down 2-3/4 at 75-3/8.

CSC, a leading computer services firm, will acquire Continuum for almost $1.5 billion in stock, adding expertise in software for insurance and banking companies. CSC will pay 0.79 of its shares for each of Continuum’s 23.9 million shares. Based on CSC’s closing stock price on Friday, a Continuum shareholder would receive the equivalent of $61.70 per share.

NASDAQ

Chase Federal Bank, down 2-1/4 at 5.

NationsBank said it agreed to buy TAC Bancshares, parent of Chase Federal Bank, for $280 million in cash. TAC owns 97 percent of Chase Federal’s outstanding shares. The deal values Chase Federal stock at $5.24 a share.