Dow Ducking Asian Financial Flu

Sat., Feb. 7, 1998

Associated Press

Stocks pushed further into record territory Friday as a robust employment report bolstered hopes that the financial mess in Asia hasn’t yet inflicted any major damage in the U.S. economy.

The Dow Jones industrial average rose 72.24 to 8,189.49, up 282.99 for the week and about 70 points shy of a new high. A midday gain of 95 points had put the Dow above 8,200 for the first time since it closed at a record 8,259.31, back on Aug. 6.

Broader stock indexes also resumed their rally after a one-session stumble, with the Standard & Poor’s 500 and the New York Stock Exchange composite closing at record highs for the fourth time this week. Computer-related shares boosted the Nasdaq market to its best finish since shortly before the Asia-induced market selloff in late October.

Thanks to a 500-point rally over the past two weeks, the Dow has quickly transformed an early 1998 slide of more than 4 percent into a gain of nearly 4 percent.

While most of the inspiration behind that rally has been a lack of worrisome developments in Asia or Washington, Friday’s advance was at least partially motivated by a report that the U.S. economy unexpectedly created 358,000 jobs in January, keeping the unemployment rate at a near 24-year low of 4.7 percent.

“The employment numbers showed that the economy is still strong” despite the drag of the financial turmoil overseas, said Russ Labrasca, a market analyst at Principal Financial Securities of Dallas, cautioning that “we still need to see Asia play itself out.”

Notably, construction accounted for a quarter of the new jobs, reflecting a strong housing market driven by falling mortgage rates - an indirect benefit of the Asian crisis. The cooling of inflationary pressures resulting from Asian turmoil helped push long-term interest rates to record lows last month in the bond market.

The Dow’s biggest gainers were J.P. Morgan, up 4-3/8 to 111-3/4; Procter & Gamble, up 2-3/8 to 82; Caterpillar, up 1 to 50; and Sears Roebuck, up 1-3/4 to 52.

Advancing issues outnumbered decliners by a 3-to-2 margin on the NYSE, where volume totaled 569.65 million - brisk, but the first tally below 700 million all week and the first below 600 million in nearly two weeks.

The Standard & Poor’s 500-stock index rose 8.92 to 1,012.46, and the NYSE composite index rose 3.34 to 526.31.

The Nasdaq composite index rose 17.45 to 1,694.35, led by technology bellwethers Oracle, up 3-1/8 to 27; Intel, up 1-3/64 to 87-35/64; and Microsoft, up 2-11/16 to 158-1/8.

The Russell 2000 index of smaller companies rose 1.44 to 445.50, and the small-company dominated American Stock Exchange composite index rose 3.32 to 680.32.

Overseas, Tokyo’s Nikkei stock average rose 0.2 percent, Frankfurt’s DAX index fell 1.1 percent and London’s FT-SE 100 rose 0.4 percent.

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