Blue-Chip Rally Lifts Dow Above 5,000 Mark

A rally of blue-chip stocks sent the Dow Jones industrial average hurtling into record territory Tuesday, closing above the milestone 5,000 mark for the first time.

The Dow Jones industrial average surged 40.46 points to 5,023.55, brushing past its previous closing record of 4,989.95 set last Friday. It was the 60th record close in the Dow average for the year.

“Institutional, name-brand stocks were characteristic of this advance,” said Eugene Peroni, director of technical research at Janney Montgomery Scott Inc. in Philadelphia. “Investors were seeking the safer haven and were looking for a less volatile area than technology stocks.”

On the New York Stock Exchange, advancing issues led declines by nearly 5 to 4, with volume totaling 405.85 million shares as of 4 p.m., vs. 335.48 million on Monday.

Fueling the record-breaking rise was a rally by a number of Dow components. Analysts also said some computer-generated buying helped thrust the Dow average to a new high.

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

NYSE

Federal Express, down 1-3/4 at 77-1/2.

Pilots of the Memphis, Tenn.-based company, who have been negotiating an employee work contract since May 1994, are discussing possible work slowdowns during the holiday season.

Chrysler, down 1/4 at 49-3/4.

Kirk Kerkorian, Chrysler’s largest shareholder, said Monday he will try to oust a company director and replace him with Kerkorian lieutenant Jerome B. York, a former Chrysler executive.

Procter & Gamble, down 1-1/4 at 86-1/2.

J.P. Morgan Securities reportedly downgraded the Cincinnati-based consumer products company from “buy” to “long-term buy.”

Sallie Mae, up 2-3/4 at 66-1/4.

A federal judge ruled Monday that the Department of Education may not charge the Student Loan Marketing Association an offset fee on the student loans it uses as assets to back securities. On Tuesday, analysts at Bear Stearns & Co. and Smith Barney Inc. raised their ratings on Sallie Mae.

NASDAQ

Dell Computer, down 1-1/8 at 40-1/4.

Morgan Stanley & Co. reportedly downgraded the Austin, Texas-based personal computer maker from “strong buy” to “outperform,” a day after Dell reported earnings that met Wall Street consensus forecasts, but said that its profits may not rise in the next quarter.

AMEX

Pamida Holdings, up 3/8 at 4-1/8.

The discount department stores operator, based in Omaha, Neb., reported late Monday that its third-quarter earnings were unchanged at 8 cents a share, on target with Wall Street estimates.