Dow Erases Early Loss, Climbs To Record High
The Dow Jones industrial average notched a fifth straight record high, but stocks were mixed overall Tuesday as interest rates rose again on budding inflation concerns.
The Dow erased an early 41-point loss and rose 34.38 to 8,584.83, pushing the rally from January’s low above 1,000 points.
Interest rates rose sharply again in the bond market amid news that sales of new homes soared 10.3 percent in January, the biggest increase in more than four years.
Much like Monday’s healthy reading on factory activity, the data suggested that the Asian fiscal crisis may not slow a resilient U.S. economy enough to keep inflationary pressures in check.
Stock investors, however, emphasized the potential boost for company profits being hurt by the Asian slowdown. Strong home sales can ripple through the economy by boosting demand for building supplies and home furnishings.
“It’s the demand side of the equation - the earnings side, the revenues side - that investors were looking at here,” said A.C. Moore, chief investment strategist for Principal Financial Securities of Dallas.
Advancing issues outnumbered decliners by a 9-to-8 margin on the New York Stock Exchange. NYSE volume totaled 612.36 million shares, up from Monday’s brisk pace.
Some of the stocks that moved substantially or traded heavily Tuesday:
NYSE
Compaq Computer, down 1-5/16 at 29-13/16.
The computer maker’s chief financial officer told attendees at a Merrill Lynch technology conference that the competition was tougher than the company had anticipated during the month of January. Afterwards, Merrill Lynch cut its rating on Compaq, Dow Jones News Service reported.
Sunbeam, up 4-1/4 at 49-7/8.
The stock rose for a second day after Sunbeam announced plans to acquire Coleman, First Alert and Signature Brands USA for about $2.4 billion in cash, stock and assumed debt.
Money Store, up 2-15/16 at 27-1/2.
Market sources said a sale of the mortgage lender may be imminent, Dow Jones News Service reported.
NASDAQ
Eagle Hardware & Garden, down 2-7/8 at 16-3/8.
The Renton, Wash.-based operator of warehouse home improvement centers in the Western United States reported disappointing fourth-quarter profits.
Fine Host, down 6-1/2 at 3-5/88888888.
The stock resumed trading after a nearly three-month halt spurred by revelations of accounting irregularities. On Feb. 6, the food concession and catering concern said it restated its results for 1994, 1995 and 1996, and the first three quarters of 1997, wiping out all of the company’s earnings during that time.