Takeover Activity Fuels Weak Rally

Stocks eked out modest gains on Thursday, with the Dow Jones industrial average propelled to another record high by mounting enthusiasm about corporate takeover activity.

The Dow average rose 4.84 to 4,205.41, inching past its record high of 4,201.61 set on Tuesday. It marked the sixteenth time the blue chip index has set a closing high since Feb. 15.

Advancing issues edged out decliners by about 10 to 9 on the New York Stock Exchange. Big Board volume was moderately heavy at 320.42 million shares as of 4 p.m., against 315.14 million on Wednesday.

The Dow average shot up 24 points early in the session, as bonds gained on a Labor Department report that first-time unemployment claims fell by 3,000 last week.

The Dow average drifted lower throughout the day as investors were fed a steady stream of weak economic data. The Commerce Department said housing completions fell 9.5 percent in February. And chain stores released weak sales figures for March.

The data prompted some investors to worry that the domestic economy may be slowing down too much for the stock market’s good.

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

NYSE

DuPont rose 1 1/2 to 64 3/4.

Seagram fell 3/4 to 27 7/8.

Seagram was expected to announce that it will sell its 24.2 percent DuPont stake back to the chemical maker for $9 billion. Seagram was reportedly close to purchasing 80 percent of MCA Inc. from Japan’s Matsushita Electric Industrial Co. for just over $7 billion.

Chase rose 3 7/8 to 41 7/8.

Chemical, up 1 7/8 to 41 1/8.

Citicorp, up 1 1/4 to 45 1/4.

BankAmerica rose 1 to 50 3/4.

Heine Securities raised its stake in Chase to 6.1 percent, saying the bank’s full value isn’t reflected in its stock price. The news spurred other banking stocks higher.

Wal-Mart fell 3/4 to 25 1/4.

March sales at stores open at least a year rose 2.2 percent; total sales were up 11.4 percent - well off the discounter’s usual strong pace.

NASDAQ

Starbucks rose 1 1/4 to 2 5/85.

Same-store sales for the five-week period ending April 2 were up 7 percent, and consolidated sales for March rose 67 percent.

AMEX

New York Bancorp rose 7/8 to 18 3/4.

Banking stocks rose after Heine Securities raised its stake in Chase Manhattan to 6.1 percent, saying the bank’s full value isn’t reflected in its stock price.