Bargain-Hunters Catapult Dow To New High

The bargain-hunters were ready as usual Thursday, quickly transforming a day of profit-taking into a buying opportunity and another record-setting session for the stock market.

The Dow Jones industrial average rose 28.57 to 8,116.93, erasing a 95-point slide en route to its third consecutive record high. With its first close ever above 8,100, the blue-chip barometer has now gained 25.9 percent this year, nearly equaling its 26 percent gain for all of 1996.

Broad-market indicators also snapped back from steep morning losses and some set new highs.

After a three-day advance that added nearly 200 points to the Dow, investors found an excuse to lock in some of those gains as the bond market stumbled on some mildly unsettling economic news.

“It’s a pretty typical occurrence nowadays. We sell off on some weakness in the bond market and then we come right back,” said Peter Canelo, U.S. investment strategist at Morgan Stanley Dean Witter. “There’s still plenty of money on the sidelines that’s going to take (stocks) higher.”

Declining issues outnumbered advancers by a slim margin on the New York Stock Exchange, where volume was heavy again at 571.03 million shares as of 4 p.m.

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

NYSE

Digital Equipment, up 2-13/16 at 42-9/16.

The nation’s fourth-largest computer maker reported a $124 million profit for its fourth quarter ended June 28, swinging from a loss in the same period last year. It was the third straight quarter in which Digital’s profits beat expectations.

AirTouch Communications, up 3 at 31-1/2.

The wireless phone company reported a second-quarter profit that exceeded expectations by a wide margin.

Lehman Brothers Holdings, down 4-1/16 at 47-15/16.

The stock gave back much of Wednesday’s big gain, which had come amid rumors the investment bank might be acquired by Chase Manhattan. Both companies declined comment.

NASDAQ

Nellcor Puritan Bennett, up 7-5/32 at 28-3/32.

Mallinckrodt, a St. Louis-based drug and chemical supplier, agreed to buy the medical device maker for $28.50 a share, or $1.9 billion.

Central Sprinkler, down 5 at 20.

The maker of components for fire sprinkler systems warned that its third-quarter results will likely fall shy of forecasts because of increased production costs and lower-than-expected prices for most products.

Baan Co. NV, down 5-1/8 at 70-5/8.

The Netherlands-based maker of manufacturing software met forecasts for its second-quarter earnings, but the stock was downgraded by Smith Barney and Deutsche Morgan Grendell.