Cooling Economy Spurs Dow To New Record

Blue-chip stocks marched to record highs for the third time this week as interest rates fell Thursday in bond trading spurred by more signs of a moderating economy that might keep inflation under control.

The Dow Jones industrial average rose 38.39 to 6,059.20, down slightly from a 45-point gain reached earlier in the session.

The technology-dominated Nasdaq market retreated, however, pressured by more profit-taking in computer-industry names whose shares had rallied in advance of this week’s strong earnings reports.

With few eye-catching earnings reports like those that dominated the past two sessions, interest shifted to economic trends.

The government reported Thursday that construction of new homes and apartments fell 6 percent last month to the lowest level of 1996, while industrial production inched up just 0.2 percent.

“The overall picture indicates that we are in an extended period of rest and recuperation after a pretty fast sprint earlier this year,” said Sung Won Sohn, chief economist at Norwest Corp. in Minneapolis. But he also cautioned that “this R&R will probably end fairly soon.”

Advancing issues outnumbered decliners by nearly a 3-to-2 margin on the New York Stock Exchange, where volume was heavy at 478.55 million shares as of 4 p.m., up from 441.41 million in Wednesday’s trading.

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

NYSE

Coca-Cola, up 3/4 at 49-1/4.

The Atlanta-based soft drink giant announced plans to buy back up to another 10 percent of its shares over the next 10 years.

AT&T, unchanged at 39-7/8.

As expected, AT&T’s third-quarter profits dropped nearly 11 percent to $1.36 billion, or 84 cents a share, amid intensified competition for long-distance calling customers and rising investment in local and mobile phone systems, as well as Internet services.

Ornda Healthcorp, up 1/4 at 27-1/2.

Tenet Healthcare agreed to buy the Nashville, Tenn.-based hospital management company for $1.8 billion in stock, creating a chain of 126 hospitals in 22 states.

NASDAQ

Apple Computer, up 5/8 at 26-3/8.

After three straight quarters of red ink, the nation’s third-largest computer maker earned a surprising $25 million profit in its fourth quarter.

Cirrus Logic, down 2-3/4 at 21-1/4.

The chipmaker reported a profit of about $3 million, or 5 cents a share, for its second quarter ended Sept. 28.

Northwest Airlines, up 1-1/2 at 32.

The carrier said its third-quarter profits rose 9.9 percent due to higher traffic.