More Uncharted Territory For Dow
A late wave of bargain hunting erased some modest losses Friday, capping off a powerful election-week rally with more record highs for the Dow Jones industrial average and other major stock measures.
The Dow, which closed above 6,200 for the first time on Thursday, rose 13.78 to a record 6,219.82, rebounding from a 15-point deficit over the last hour. It was the fifth straight winning session for the Dow, which gained 197.89 points, or 3.3 percent, on the week.
The Standard & Poor’s 500 stock index and the New York Stock Exchange composite index closed at highs for the fourth consecutive day, while the Nasdaq composite index moved within a point of its first record close since mid-October.
Stocks were pressured most of the session by a weak bond market, which provided an excuse for investors to lock in some profits on the big advance spurred by Tuesday’s election results. The strength of that rally was unexpected by many analysts because voters served up few surprises at the polls.
But the enthusiasm over at least two more years of a Democratic presidency and a Republican-led Congress - a winning combination for stocks thus far - has made money managers and traders hesitant to risk missing the next advance. So when stocks didn’t drop more sharply as bonds fell Friday, many people viewed the small dip as a buying opportunity, analysts said.
Bond prices fell after new wholesale trade data from the government showed declining inventories for the third straight month, offering the prospect of increasing production to compensate. With production costs such as wages on the rise, some analysts worried that growing demand could translate into higher prices and interest rates.
The slight retreat in bonds wasn’t very troubling to stock investors, who on Thursday were treated to an eight-month low in the yield on the 30-year Treasury, a key determinant of corporate and consumer borrowing costs.
Advancing issues outnumbered decliners by a 6-to-5 margin on the New York Stock Exchange, where volume totaled 402.32 million shares as of 4 p.m., down sharply from Thursday’s 500.74 million.
The S&P 500 rose 3.17 to 730.82, the NYSE’s composite index rose 1.41 to 386.32, and the American Stock Exchange’s market value index rose 1.14 to 580.39.
The Nasdaq composite index rose 3.37 to 1,257.51, just shy of Oct. 15’s record of 1,258.10, as several bellwether technology issues recovered from the the day’s early profit-taking.
Software maker Novell jumped $2.37-1/2 to $11.50 as the Nasdaq’s most active issue, while Iomega, down $1 at $24.37-1/2, led the NYSE’s most active list on its first day on the Big Board.
Conrail jumped $3.37-1/2 to $96.37-1/2 in active NYSE trading as Norfolk Southern raised its hostile takeover bid for the railroad to $110 a share in cash.
The Dow’s strongest issues were Merck, up $1.25 at $80.50, and Sears Roebuck, up $1.12-1/2 at $49.12-1/2.