Dow hits record, but small stocks retreat

WALL STREET

February 06, 1993|By Bloomberg Business News

NEW YORK -- Stock prices closed mixed yesterday, as signs of economic expansion in the United States fueled demand for large companies expected to benefit the most from a recovery.

The Dow industrials set a record for the second day in a row, while declines in bellwethers Amgen Inc. and Intel Corp. pulled the over-the-counter market from Thursday's all-time high. A late upswing in Microsoft Corp. narrowed the losses in NASDAQ issues.

Interest-rate cuts in Germany and Japan, coupled with growing optimism about the U.S. economy, sent stock market averages to record levels Thursday. That optimism was reinforced yesterday, when the Labor Department said the economy created 106,000 non-farm jobs in January, while the unemployment rate fell to 7.1 percent, its lowest level in one year, from 7.3 percent in December.

"I think you'll see money continue to flow into the more economically sensitive stocks like the paper, chemical and manufacturing companies," said John Brooks, director of sales and marketing at Notley Group.

The Dow Jones industrial average gained 25.40, to an all-time closing high of 3442.14, surpassing Thursday's close of 3416.74. The rise was led by Du Pont Co., Aluminum Co. of America and Minnesota Mining & Manufacturing. Friday's session high of 3443.22 was the highest level ever. The Dow was up 132.11 points, or 4 percent, for the week.

Broader market averages lost ground. The Standard & Poor's 500 index closed at 448.93, down 0.63 from Thursday's record close of 449.56.

The NASDAQ Combined Composite index fell 7.87 points from Thursday's record closing high of 708.85, to close at 700.98. The index had soared 15 percent in the past three months, led by rallies in computer software and semiconductor issues.

A late reversal in Microsoft Corp. lifted the over-the-counter market. Microsoft closed up $4, at $89, after the Federal Trade Commission said it hasn't decided on possible antitrust action against the software maker.

Declining common stocks topped advancers by a margin of 9-to-7 on the New York Stock Exchange. Trading slowed somewhat from the furious pace of recent sessions, as more than 320 million shares changed hands on the Big Board, down from 346.5 million Thursday.

Soft drinks, general retail stores, foods, and telephone fell the most in the S&P 500, outweighing the gains in chemicals, oil services, paper and forest products and electrical equipment stocks.

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