Dow Forges Ahead Despite Weak Dollar, Bonds
The Dow Jones industrial average pushed to record high territory on Friday for the third time this week, but the broader stock market was held back by weak bonds and the dollar.
The Dow average of 30 industrial stocks closed up 4.50 at 4,073.65, topping its last record of 4,069.15 set just Thursday.
Traders attributed the Dow’s buoyancy to Friday’s triple expiration of stock options and futures contracts. The broader market was not nearly as strong as the blue chips.
Declining issues led advancers by about 13 to 9 on the New York Stock Exchange. Big Board volume was very heavy because of the expirations, logging in at 415.79 million shares as of 4 p.m. That was one of the highest volumes ever, and easily topped Thursday’s figure of 336.70 million shares.
The dollar stumbled, finishing lower on the day at 89.05 yen and about 1.38 marks. The dollar sent bond prices lower. The 30-year bond was off 1-32 point late in the session, but had recovered from a drop of nearly point.
Friday’s expirations aside, there is “an overall bullish momentum” to the stock market, said Bob Walberg, market analyst at MMS International in Chicago.
“The momentum should carry us” higher, Walberg said. “There is plenty of cash coming into the marketplace, and we still have short covering” supporting prices.
Some of the stocks that moved substantially or traded heavily Friday:
NYSE
Rhone-Poulenc Rorer’s American depositary receipts rose 1 3/8 to 17 3/8.
The French drug maker said it will buy all of its outstanding Participating Shares Series A, represented by American depositary shares, at $17.50 per share.
Motorola fell 1 to 55 3/8.
The company agreed with Cincinnati Microwave to license each other’s patents for the cellular digital packet data standard, which allows for the wireless transmission of data over existing cellular networks.
Wal-Mart fell 3/8 to 24 3/8.
Retailers, including Wal-Mart, have had to cut back expansion plans in Mexico as the plunging peso has cut into consumer demand, The Wall Street Journal reports.
Cordiant PLC rose 3/8 to 4 3/8.
Saatchi & Saatchi, the London advertising agency which recently saw the departure of its founders, the Saatchi brothers, changed its name to Cordiant in an attempt to establish a new market identity. Cordiant shares began trading on Friday.
NASDAQ
Aldila fell 7-16 to 6 5-16.
The stock was responding to speculation that the maker of golf-club shafts would be bought.
Applied Materials rose 2 15-16 to 54 3/4.
The company said Thursday it would increase its work force by 43 percent by October, citing growing demand for semiconductors. Applied Materials makes machinery used in semiconductor production.
AMEX
Viacom “B,” unchanged at 46.
The company is exploring ways to sell its cableTV business to Tele-Communications, despite Congress’s rejection of a tax credit tied to the planned sale.