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Investor Optimism Lifts Dow To Record High

Associated Press

The Dow Jones industrial average soared more than 100 points on Wednesday, shooting toward the 7,000-mark only four months since it first crossed 6,000.

Broader measures also rallied over the last two hours of trading, with the Standard & Poor’s 500 list breaking past the 800-mark for the first time.

The Dow jumped 103.52, or 1.5 percent, to 6,961.63. It was the fifth-biggest point-gain ever for the Dow, which first hit the 4,000-mark less than two years ago. It was the 11th new high for the Dow this year, bringing the famed blue-chip average’s 1997 gain to nearly 8 percent.

There were no significant economic developments to spur Wednesday’s rally, which analysts attributed in part to a report confirming that money continued to pour into mutual funds last month, reinforcing the demand for stocks.

“Equity investors truly believe that the Federal Reserve has no reason to move interest rates to the upside” to slow the economy as insurance against rapid inflation, said Ned Riley, chief investment officer at the Bank of Boston. “There’s even some optimism that there’s a possibility of a Fed rate cut over the next three-to-four months.”

Advancing issues outnumbered decliners by a 7-to-3 margin on the New York Stock Exchange, where volume was heavy at 563.55 million shares as of 4 p.m., up sharply from the previous session.

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

NYSE

ITT, up 1-5/8 at 5-5/87.

Hilton Hotels, down 1/2 at 27-5/8.

Sheraton hotels owner ITT rejected Hilton’s $6.5 billion hostile takeover offer, saying the $55 a share bid was too low and raised too many conflicts between the competing hotel chains.

Time Warner, up 1-1/4 at 42-3/4.

The media conglomerate reported some progress in discussions aimed at restructuring the cumbersome partnership with US West that controls the majority of its cable systems.

Converse, up 4-3/8 at 20-3/4.

Smith Barney analyst Faye Landes raised her rating on the sneaker maker to “buy” from “outperform,” and Dillon Read & Co. initiated coverage of Converse with a “buy” rating.

NASDAQ

Applied Materials, up 7 at 52-1/8.

The leading manufacturer of equipment to make computer chips reported an 83 percent drop in profits for its first quarter ended Jan. 26. But late Tuesday’s report was stronger than expected, and showed impressive growth in orders.

Fractal Design, up 2-1/4 at 10-3/8.

The software company agreed to be acquired by MetaTools of Carpenteria, Calif., for about $160 million in stock.

Wireless Cable of Atlanta, up 2-3/8 at 19-7/8.

BellSouth agreed to acquire Wireless Cable for stock worth about $46.9 million, or $22 a share.

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