Dow Reaches New High Despite Budget Feud

Stocks climbed to record heights Thursday for the second day in a row, despite budget brawling in Washington that sent bond prices and the dollar lower. Technology issues surged.

The Dow Jones industrial average rose 11.56 to 4,864.23, topping its previous closing high of 4,852.67 set on Wednesday.

Stocks rose despite a 1/2-point loss in the Treasury’s 30-year bond and a sharp drop in the dollar. That occurred after President Clinton convened a Cabinet meeting to discuss how to shut the government down if Congress does not reach an agreement with the White House on the budget.

Unless a spending bill is enacted by midnight Monday, the federal government could be forced to take the unprecedented action of defaulting on its debt.

“The decline in the dollar and bond market clearly reflects the growing worries, particularly among foreign investors, that the U.S. government might become involved in a technical default,” said Hugh Johnson, First Albany Corp.’s market strategist.

Advancing issues had a slim lead on decliners on the New York Stock Exchange. Big Board volume was substantial at 379 million shares as of 4 p.m., up from 359.77 million Wednesday.

Some of the stocks that moved substantially Thursday:

NYSE

Micron Technology rose 3 to 65.

Motorola rose 2-7/8 to 67-5/8.

National Semiconductor rose 1-7/8 to 23-7/8.

IBM rose 5/8 to 98-3/8.

Cypress Semiconductor rose 1-3/8 to 17-3/4.

Semiconductor issues rallied strongly after the National Semiconductor Association said late Wednesday that its book-to-bill ratio was 1.18 in October, higher than analysts had expected. A book-to-bill ratio of 1.18 means that for every $100 of semiconductors shipped, the industry received orders worth $118.

KMart fell 1/2 to 7-3/4.

Standard & Poor’s Corp. said Tuesday that it may downgrade its debt because of concerns about $681 million in real estate debt having put provisions that can be exercised if the company’s credit rating falls below investment grade.

NASDAQ

Intel rose 3-1/16 to 69.

Cirrus Logic rose 1-1/2 to 30-1/8.

Microsoft rose 3-3/4 to 99.

Applied Materials rose 4-1/4 to 52.

Semiconductor stocks rallied strongly.

AMEX

Incyte Pharmaceutical, 18-1/2, down from an original price of 19.

The Palo Alto, Calif., company priced 1.7 million common shares at $19 each.