Stocks Show Surprising Strength
The stock market defied expectations Monday in climbing to another record close as investors cast aside concerns about the economy.
The Dow Jones industrial average benefited from renewed buying interest in stocks of economically sensitive companies, which had encountered selling lately amid signs of slower growth. The Dow surged 40.47 to 4,383.87, exceeding the previous peak of 4,373.15 set on May 3. The blue-chip gauge has reached closing records 25 times so far this year.
Among the broad measures that advanced, the New York Stock Exchange composite index hit a new high of 281.68, up 1.78 for the day and above the May 3 mark of 279.94. The Nasdaq Stock Market composite index spurted 5.76 to 849.29, about a point shy of its high set on May 3.
Gainers beat losers by about 2 to 1 on the Big Board where volume came to 291.77 million shares as of 4 p.m. Eastern time. On Friday, 342.36 million shares changed hands.
Wall Street’s strength confounded market professionals who have been expecting the extended advance in stocks to stall after months of recordsetting sessions.
“The rally came out of nowhere,” said Oded Levy, head of the trading desk at Genesis Merchant Group. “I was thinking the market was going to go down. I was looking for everybody to be pessimistic this week.”
Some of the stocks that moved substantially or traded heavily:
NYSE
W.R. Grace, up 2 3/4 to 61 1/4.
The stock spurted amid reports that Grace might be a takeover target or could ultimately sell its National Medical Care unit for a higher price than already offered by the subsidiary’s chief.
Continental Homes, up 2 to 15 1/4.
Stocks of builders and developers were boosted amid speculation that declining interest rates will spur real estate sales. Ryland rose 1 3/4 to 17 1/4, Pulte rose 2 1/2 to 25 3/8 and Centex rose 2 5/8 to 29 1/8.
U.S. Bancorp, down 2 1/4 to 24 1/2.
U.S. Bancorp and West One Bancorp, have agreed to a stock merger valued at $1.6 billion. West One rose 1 1/4 to 33 3/8.
NASDAQ
WavePhore, up 2 5/8 to 15 3/4.
The company will develop data broadcasting technology for Intel related to the reception of data transmitted within video television signals. Also under the agreement, Intel acquired the right to buy up to 250,000 WavePhore common shares over the next two years. Intel jumped 3 to 111 5/8 in Nasdaq-leading volume of more than 7.3 million shares.
Apple Computer, up 1 1/2 to 40 3/8
The computer company unveiled the next generation of its Mac OS operating system, which is codenamed Copland and targeted it for delivery in mid-1996.