Dow Falls Short Of Record As Investors Cash In

Some late profit-taking prevented a new record for the Dow Jones industrial average, but the stock market rose confidently Thursday as a tame inflation reading eased worries about higher interest rates.

Broader stock averages advanced with the Dow, with some moving back toward record levels for the first time since spring.

The Dow rose 17.02 to 5,771.94, finishing about 6 points shy of its highest close of 5,778.00, set May 22.

Stocks drew a lift from the bond market, where traders welcomed news that wholesale prices fell 0.1 percent last month, excluding the volatile food and energy sectors. Overall, producer prices rose 0.3 percent in August.

“It was clearly a number that gives the Fed an opportunity to not raise rates this month,” said Tracy Herrick, chief investment strategist at Jefferies & Co., noting that the Federal Reserve would like to avoid having any impact on the presidential campaign.

Advancing issues outnumbered decliners by more than a 5-to-3 margin on the New York Stock Exchange, where volume totaled 398.82 million shares as of 4 p.m., the busiest pace since early August.

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

NYSE

Gillette, up 7/8 at 66.

Duracell International, up 9 at 58-1/8.

Gillette agreed to buy Duracell for more than $58 per share worth of stock in a $7 billion deal. Each Duracell share is to be swapped for 0.904 of a Gillette share.

Xerox, down 3-1/4 at 54-5/8.

The company announced late Wednesday that a $2.7 billion deal to sell its property-casualty insurance division to a group led by Kohlberg Kravis Roberts has collapsed.

United Healthcare, up 1-1/8 at 41-1/4.

The stock rose for a second day on news that the American Association of Retired Persons will negotiate with the Minneapolis-based managed-care company for the bulk of a $4.5 billion health-care contract.

NASDAQ

Heartstream, up 2-5/8 at 13-7/8.

The Seattle-based company received FDA approval to market its ForeRunner defibrillator, the first in a new wave of smaller, cheaper devices to restart hearts.

Boca Research, up 2-1/4 at 12.

U.S. Robotics, up 4-7/8 at 61-3/4.

Boca announced plans to build 56-kilobits-per-second modems based on a high-speed technology announced Tuesday by Rockwell International. U.S. Robotics, the market leader, earlier this week said it was investigating the new technology, the Dow Jones News Service reported.