Dow closes above 3,000 for first time

April 18, 1991|By Thomas Easton | Thomas Easton,New York Bureau of The Sun

NEW YORK -- Months into a severe recession and on a day when a rail strike threatened to paralyze one-third of all industrial shipments in the United States, the Dow Jones industrial average registered a soaring confidence in the country's future prosperity by closing above the 3,000 mark yesterday for the first time.

The Dow rose 17.58 points, to 3,004.46, to end above a millennium mark briefly breached last July.

The Dow's move to new highs comes weeks after records were established by broader indexes of the domestic markets, as well as by the indexes tracking many other major markets worldwide, including those in London, Australia, Singapore, Taiwan and Frankfurt, Germany.

The irony of a surging market at a time of constriction in economic growth hasn't been lost on Wall Street, where almost one-quarter of the employees have lost their jobs since 1987, when the Dow first broke 2,000.

But in recent weeks, New York Stock Exchange Vice Chairman Donald Stone said, laughter had returned to the trading floor, and yesterday's close was followed by sustained applause.

"The market is alive and well," Mr. Stone said.

Trading was heavy during the session, with volume of 246.9 million shares.

Two issues advanced in price for every one that declined.

In an unusual display of collective strength, Fidelity Investments 35 bellwether sector funds, each structured to cover a major industry group, all finished the day above where they began.

The best performance was registered by regional banks, recently disparaged by all but the bravest investors because of mounting loan losses and defaults.

Registering among the largest percentage gains was Baltimore-based MNC Financial Inc., a regional bank that appeared headed for insolvency several months ago.

Its shares, which traded for less than $2 apiece in January, rose during trading from $4.25 to $5.125 yesterday.

Interest in the market's recent surge has spread far beyond Wall Street's professional investors, in contrast to the rebound that occurred immediately after the 1987 crash. T. Rowe Price, the Baltimore-based mutual fund company, said that record amounts of cash were deposited by individuals into equity funds during February and that this month the rate has increased.

And optimists abound that the market could go higher still.

Elaine Garzarelli, director of quantitative strategies for Shearson Lehman Brothers and among the most closely followed market analysts, said that a fair value for the Dow would be 3,150 and that a rise to 3,400 would conform to the historical tendency of prices to overshoot at the end of a rally.

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