‘Witching Hour’ Magic For Dow
Stocks were mostly higher Friday, lifting some measures to record highs, but the buying was restrained with many investors awaiting next week’s key Federal Reserve meeting on interest rates.
The Dow Jones industrial average rose 20.72 to 5,888.46, closing less than a point from Monday’s record close of 5,889.20. The Dow, which last Friday notched its first new high in nearly four months, gained 49.94 points for the week.
The Standard & Poor’s 500-stock list and the New York Stock Exchange composite index both set new highs, and the Nasdaq composite index rose for the 11th straight session, led again by bellwether technology issues.
The session was unusually brisk as traders repositioned their complex investing strategies amid Friday’s “triple witching” expiration of stock-related options and futures contracts.
Despite the volume, however, trading was somewhat unmotivated amid the uncertainty over whether the Fed’s policy-makers will raise the central bank’s key lending rates when they meet on Tuesday.
“It’s a split decision on whether the Fed will boost rates up next week, but for all practical purposes, a (small increase) is built into the market, and will have only a minimal effect if it happens,” said Bob Dickey, managing director of technical analysis at Dain Bosworth in Minneapolis.
While inflation has been tame, strong economic growth has produced rising production costs which could translate into higher prices. Higher Fed lending rates would help contain inflation by slowing consumer spending, but that could hurt company profits.
Advancing issues outnumbered decliners by an 11-to-7 margin on the New York Stock Exchange, where volume totaled 514.32 million shares as of 4 p.m., the first tally above 500 million since mid-July.
The Standard & Poor’s 500-stock index rose 4.02 to 687.02, and NYSE’s composite index rose 1.83 to 365.77, both exceeding Monday’s record closes.
The Nasdaq composite index rose 7.59 to 1,219.68, putting it about 30 points from its June 5 high of 1,249.15.
The advance was again led by its bellwether technology issues, demonstrating investors continuing reluctance to bet heavily on the more speculative issues that dominate the Nasdaq market.
The American Stock Exchange’s market value index, which is also dominated by smaller companies, fell 0.24 to 565.20.
Among active Nasdaq issues, Intel rose 12-1/2 cents to $97.37-1/2, continuing to ride a wave of enthusiasm from its upbeat revenue forecast on Monday, and Microsoft advanced 37-1/2 cents to $138.12-1/2 despite news that the Justice Department has begun an antitrust investigation into the company’s Internet strategy.
Microsoft’s arch competitor in the Internet market, Netscape Communications, jumped $5.37-1/2 to $50.87-1/2 in Nasdaq trading.
Overseas, Tokyo’s Nikkei stock average fell 1.0 percent, Frankfurt’s DAX index rose 0.8 percent, and London’s FT-SE 100 fell 0.3 percent.