Market Moving On Autopilot
An apparently unstoppable stock market bounded to its sixth straight day of record highs Friday on fresh evidence that inflation remains subdued.
The Dow Jones industrial average rose 70.57 to 7,782.04 after coming within a third of a point of 7,800. The advance came just one day after the blue-chip barometer broke both the 7,600 and 7,700 marks for the first time ever.
The Dow was up 364.26 points for the week and now has risen more than 20 percent so far this year, a performance well beyond expectations as 1997 began.
“The market is moving on sheer momentum; it’s on autopilot,” said Marshall Acuff Jr., market strategist at Smith Barney Inc. “It’s sort of like a parade going down the street.”
Advancing issues led decliners by a 2-to-1 margin all day on the New York Stock Exchange, where volume was strong at 566.94 million shares, but down slightly from Thursday’s pace of 592.89 million.
Broad-market indexes also set records, including the Nasdaq composite, which had lagged in previous sessions but rose Friday on recovering technology issues.
The Standard & Poor’s 500-stock list rose 9.79 to 893.27, and the NYSE’s composite index rose 4.53 to 465.17, both setting records for a sixth straight session.
The Nasdaq composite index gained 11.71 to 1,423.03 and its first new high since Monday, and the American Stock Exchange composite rose 3.98 to 630.10 and its fifth straight record.
The string of six straight record closes for the Dow is impressive but not near the record of 12, set in January 1987, nine months before the crash.
Investors pushed prices higher Friday after getting yet another encouraging report that the economy is not overheating.
The Labor Department said prices paid to producers from farms and factories fell in May for the fifth straight month. The report was the latest evidence that inflation is under control, giving the Federal Reserve little incentive to raise interest rates when it meets early next month.
The report seemed to confirm Thursday’s figures on lower retail sales.
Stocks were aided by falling interest rates in the bond market. Both stocks and bonds were helped by a rise in the dollar as prospects faded in Europe for strict financial requirements to participate in the proposed unified currency.
American Express led the Dow industrials higher, rising 3-1/2 to 76-5/8, amid resurrected rumors that the financial services company was about to be acquired by Citicorp. Both companies declined comment.
Citicorp’s stock initially fell on the rumors but ended up 1-5/8 at 120-5/8. American Express’s stock rose last December on the same rumors, and it came to light then that American Express had in fact approached Citicorp to acquire it last fall but the companies had broken off discussions.
European stock markets ended higher, with the DAX in Frankfurt adding 1.75 percent and the FT-SE 100 index in London climbing 0.54 percent to another record. But the Nikkei in Tokyo dipped 0.18 percent.