Financial issues lead Dow up 22.04 Dow Jones industrials close at 5,070.88 for another record


NEW YORK -- U.S. stocks, led by financial issues, rose to more records yesterday as investors bet that lower borrowing costs will boost corporate earnings next year.

The Dow Jones industrial average reached its 63rd record this year. Gains in BankAmerica Corp., Federal National Mortgage Association and J. P. Morgan & Co. pushed the Standard & Poor's 500 index to an all-time high amid signs that the economy's five-year-long expansion remains intact.

The Dow industrials rose 22.04 points to 5,070.88, their 11th advance in 13 days. The average is up 273 points since Nov. 7. Procter & Gamble Co. jumped $1.25, to 87.75, and Walt Disney Co. rose 37.5 cents, to $62.875, on the successful debut of its "Toy Story" animated film over the Thanksgiving holiday.

The Standard & Poor's 500 index jumped 1.35, to 601.32, its 71st record this year. In percentage terms, shares of consumer loan, savings and loan, and homebuilding stocks posted the biggest gains.

The Nasdaq composite index, which has lagged the Dow's rally since mid-October, fell 0.85, to 1,029.32, after being up 7.65 points. It was the index's fourth drop in five days.

Yesterday's most active stocks in U.S. composite trading were Intel Corp., Kmart Corp., Vodafone Group PLC's American depositary receipts, Hanson PLC's ADRs and Applied Materials Inc.

By day's end, about six stocks advanced on the New York Stock Exchange for every five that fell. Stocks pared gains late in the day after a series of computer-guided sell orders.

Financial issues, whose profit margins widen as rates decline, rallied as evidence of weakness in the housing market restored optimism the Federal Reserve will soon cut interest rates. Sparking the optimism was a report from the National Association of Realtors showing sales of existing homes dipped in October for the first time since April.

Among those that gained, NationsBank Corp. rose $1.25 to $72.50; Fannie Mae added 62 1/2 cents to reach $108.50; J. P. Morgan spurted 87 1/2 cents to $77.875; and Household International Inc.'s stock rose $3.125 to $60.125.

The gain in thrifts was helped by expectations that potentially favorable tax laws will make them attractive takeover candidates.

Glendale Federal Bank climbed 62.5 cents, to $6.375; California Federal Bank rose 25 cents, to $15.125; and Golden West Financial Corp. rose 87.5 cents, to $52.125.

Among broad market indexes, the Russell 2000 index of small capitalization stocks rose 0.97, to 303.23; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq stock exchanges, rose 11.65, to 5,904.26; the AMEX market value index fell 0.41, to 530.86; and the S&P 400 midcap index rose 0.31, to 214.33.

Gold-mining stocks also climbed. The precious metal jumped $2.80 an ounce to $384.90 in response to expectations of falling interest rates in major industrial nations and rising demand from jewelers and other gold fabricators.

Newmont Gold Co. rose $1.125, to $39.625; Barrick Gold Corp. rose 75 cents, to $26.75; and Placer Dome Inc. gained 62.5 cents, to $24.75. The S&P gold index of six stocks gained 8.68, to 239.65, its highest since early October.

The large multinational companies that make up the Dow industrials have benefited the most on expectations they will post the strongest earnings for the fourth quarter.

A rally in the U.S. dollar relative to other major currencies also gave the market a boost.

Among other shares that gained, computer company Cray Research Inc. jumped 87.5 cents, to $23.125, after the Wall Street Journal said the company will unveil a new parallel-processing computer tomorrow.

Boston Technology Inc. surged $3.375, to $15.25, after AT&T Corp. said it would buy 5 million of the voice-messaging system maker's shares.

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