Momentum Carries Stocks To Another Record

The Dow Jones industrial average made quick work of another milestone Thursday, plowing past 7,000 as the stock market rallied amid more signs the economy isn’t growing at an inflationary pace.

The Dow settled at 7,022.44 at the close for a gain of 60.81 on the session and a three-day advance of 215.90 points, or more than 3 percent.

The focus of the buying remained big, recognizable names with more predictable earnings and less vulnerability to the economy’s ebb and flow. Thursday’s biggest gainers in the Dow, for example, were Merck, a leading pharmaceutical concern, and Philip Morris, a consumer products giant.

“Its a narrow market where investors are paying for earnings certainty and strong earnings momentum,” said David Shulman, chief market strategist at Salomon Brothers. “The leadership is very much the same as last year’s, a very nifty 50.”

Advancing issues outnumbered decliners by more than a 2-to-1 margin on the NYSE, where volume was heavy at 584.37 million shares as of 4 p.m., up from Wednesday’s 563.56 million.

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

NYSE

USLife, up 5-1/4 at 47.

American General agreed to buy New York-based insurer USLife for $1.8 billion in stock. Each USLife share is to be swapped for $49 worth of American General stock.

Barrett Resources, up 2-3/4 at 38.

The Denver-based company said a test well in the Wind River Basin of Wyoming looks encouraging. Barrett, which has about an 85 percent interest in the well, said further testing will be required to test its productive capabilities.

Discount Auto Parts, down 5-1/8 at 13-3/8.

Airgas of Radnor, Pa., late Wednesday filed a lawsuit in U.S. District Court against Discount Auto Parts, alleging the retailer engaged in racketeering activity involving the sale of smuggled and counterfeit R-12 refrigerant gas.

NASDAQ

Galileo, down 11-3/4 at 6-7/8.

The fiber-optics concern warned that the loss of its largest customer would cause it to post a loss for the fiscal year.

Gibson Greetings, up 1 at 20-1/2.

The Cincinnati-based greeting cards maker’s fourth-quarter profits fell 18 percent, but the results exceeded analyst expectations.

Donnelley Enterprise Solutions, down 11-3/4 at 12.

The provider of information management services said it expects to report 1996 revenues and income below analyst estimates.

Collaborative Clinical Research, down 3-3/8 at 9.

The Cleveland-based manager of clinical research sites reported fourth-quarter earnings below expectations.