Dow closes at record 3,478.61 But broader market remains lackluster

April 17, 1993|By New York Times News Service

NEW YORK -- The Dow Jones industrial average closed at an all-time high yesterday -- by 0.27 point -- partly because of computerized trading programs timed to go off when the Dow approaches a high.

The Dow rose 22.69 points, to 3,478.61, exceeding its March 10 high of 3,478.34. But the slight rise in the broader-based Standard & Poor's 500 index provided a better measure of what much of this week's trading seemed to be: meandering.

Amid no clear indication of whether the economy is strengthening, the market's performance yesterday was a tale of these two indexes.

To market optimists, the Dow's performance demonstrated its seemingly inevitable rise to 3,500. But, as in trading earlier this week, much of the gain came late in the day.

Buy orders were probably from computer programs tied to this month's expiration of options on stock indexes and options on individual stocks. Such programs accelerate the upward movement of prices when the Dow Jones industrial average, other indexes and individual stocks approach record highs.

The Standard & Poor's 500 index told another story. The movement of the S&P 500 seemed desultory and in an extremely narrow trading range, mirroring investors' uncertainty over where invest.

The S&P 500 gained 0.54 point,to 448.94.

Seven stocks lifted the Dow by a point or more, including J.P. Morgan, Du Pont and Minnesota Mining & Manufacturing.

Six stocks pulled it down a quarter-point or more, including Walt Disney, Coca-Cola and Goodyear Tire and Rubber. Unlike the S&P index, the Dow is not calculated to give more weight to the price swings of bigger companies than to those of smaller companies.

The S&P 500 is watched by experts as a better measure of overall market performance.

Yesterday, it did not appear as positive as the Dow because 167 declining stocks, notably Gillette, Pepsico, Coca-Cola and Wal-Mart, dragged it down.

The brand-name beverage stocks were especially hurt because analysts were impressed by a presentation by Cott Corp. on the prospects for its private-label soft drinks.

Consumer goods stocks have been making investors nervous, and they have responded negatively to each report of a slowing economic recovery and the pondering in Washington of proposals like a national value-added tax.

The New York Stock Exchange composite index closed up 0.35 point, at 247.74, but the Nasdaq composite index closed down 3.54 points, at 666.78. Big Board volume was 300.6 million, up from 259.3 million shares on Thursday. Winners on the Big Board barely outnumbered losers yesterday.

The Big Board's most-active list, consisting mainly of consumer-product and retail stocks, was a reflection of the market's concerns ever since April 2.

On that day, which traders now call Marlboro Friday, Philip Morris, a favorite of institutional investors, announced plans to 00 discount its most profitable cigarette, Marlboro.

Institutional investors have since bid down most consumer-products companies, like Coca-Cola and Wal-Mart, on the theory that they, like Philip Morris, are vulnerable to price


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