The Dow Jones industrial average rolled toward 7,900 on Thursday, tacking on more than 100 points as the latest economic data validated the rosy outlook among Federal Reserve officials and investors.
The Dow rose 100.43 to 7,895.81 for its first close above 7,800. The famed blue-chip barometer rose 208.09 for the holiday-shortened week, and has now gained nearly 1,500 points, or 22.5 percent, on the year.
Broader stock measures also cruised to new highs after a Labor Department report showing that upward pressures on employment costs - the leading force behind inflation - remained mild last month.
The data jibed with Wednesday’s verdict by Fed policy-makers, who apparently decided that inflationary pressures aren’t severe enough for the central bank to slow the economy with higher interest rates.
“The Fed got it right by not raising rates in May and not raising rates yesterday,” said Alan Skrainka, chief market strategist at Edward Jones of St. Louis. “The news out of the employment report is that the economy continues to grow at a pace that is consistent with low inflation and strong earnings growth.”
Some of the stocks that moved substantially or traded heavily Thursday:
Northrop Grumman, up 21-1/8 at 110.
Lockheed Martin, down 4-7/8 at 99-1/8.
Logicon, up 12-3/4 at 67-1/4.
Los Angeles-based Northrop Grumman agreed to be acquired by Bethesda, Md.-based Lockheed Martin for $8.3 billion in stock and $3.3 billion in assumed debt in a merger of the nation’s largest defense contractors. In May, Northrop agreed to buy Torrance, Calif.-based Logicon in a stock deal then valued at about $725 million.
Duty Free International,up 3-5/8 at 23-3/4.
The airport retailer agreed to be acquired by London-based BAA, the world’s largest commercial operator of airports. Duty Free is based in Ridgefield, Conn.
MCI Communications, up 2-3/8 at 42-3/8.
The Washington, D.C.-based long-distance provider rose on positive tax news for British Telecom. The two telephone giants plan to merge in the fall.
Inso, down 9-5/8 at 11 1/16.
The maker of multilingual software announced a restructuring late Wednesday amid a deteriorating market for some products. The restructuring includes charges of $5 million to $6 million.
Krystal, up 7-1/4 at 13-1/2
The fast-food restaurant chain agreed to be acquired by Port Royal Holdings. Shareholders of Krystal will receive $14.50 a share in the merger. Port Royal is a closely held company formed by Phillip Sanford, an executive with Coca-Cola Enterprises Inc.
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