Dow leaps 98 points as investor hopes rise Resurging economy boosts key index to record 5,683.6

March 19, 1996|By Bloomberg News Service

NEW YORK - U.S. stocks soared yesterday, driving the Dow Jones industrial average to an all-time high. Enthusiasm spread that the economy is expanding fast enough to heat up corporate profits.

Shares of paper, aluminum and retail companies gained the most, reflecting confidence in the economy's resurgence. The Dow industrials jumped 98.63 points to 5,683.60, setting its eighteenth record for the year, while the Standard & Poor's 500 Index posted its biggest one-day gain since May 31.

Rising employment and industrial production in the last couple of weeks bolstered investors' optimism that profit growth will be strong enough to justify higher stock prices.

The S&P 500 added 11.22 to reach 652.65 still below its high of 661.45 set Feb. 12. The Nasdaq Composite Index climbed 14.83 to 1114.42. Economically sensitive chemical, paper and metal issues led the advance and helped push the Morgan Stanley Cyclical Index up 8.85, or 2.3 percent, to a high of 391.01.

Among the so-called cyclical stocks that rallied, CSX Corp. jumped $2.625 to $47.75; Ryder System Inc. gained $1.375 to $28.75; Union Carbide Corp. rose $2.125 to $49.75; and Aluminum Co. of America leaped $2.50 to $63.50.

Among the Dow industrials that gained, International Business Machines Corp. jumped $4.75 to $124.625 and J. P. Morgan & Co. climbed $2.50 to $82.50. Boeing shares surged $4.75 to $85.625 after the company said it will boost production of certain jetliners next year, reflecting a rebound in demand for commercial airplanes.

About 1,719 stocks rose and 713 fell on the New York Stock Exchange, where 436.6 million shares changed hands, compared with 395.1 million daily average trading volume over the last six months.

The Russell 2000 Index of small company stocks climbed 3.59 to a record 328.67; the American Stock Exchange Value Index added 3.27, approaching its all-time high of 570.31 on March 7; and the Wilshire 5000 Index of stocks from the three major exchanges vaulted 98.81 to 6414.34, below its 6449.33 high of Feb. 22.

Stocks took off later in the day as bond prices climbed, pushing yields down. The yield on the benchmark 30-year Treasury fell 3 basis points to 6.70 percent, after rising to 6.74 percent. Computer and software companies rose, pushing the Morgan Stanley High Tech index up 9.08, or 2.7 percent, to 334.96. Xilinx Inc, America Online Inc. and KLA Instruments Corp. were among the biggest gainers.

A report showing passenger traffic for nine major airlines climbed 10 percent last month helped push the companies' stocks higher. Gains in the airline group, coupled with an advance in railroad stocks, helped push the Dow Jones Transportation Average to a record 2,184.75, up 49.46.

Dow's big days

The Dow Jones industrial average staged its fifth-largest point gain ever yesterday, but it was a relatively small percentage rise. The best days for the average, including the percentage change in value:

Date .... .... .... .... Points .... .... .... % rise

Oct. 21, 1987 ..... .... 186.84 .... .... .... 10.1

Jan. 17, 1991 ..... .... 114.60 ..... .... .... 4.6

March 11, 1996 .... .... 110.55 .... .... ..... 2.0

Oct. 20, 1987 .... ..... 102.27 .... .... ..... 5.9

Yesterday .... .... .... 98.63 ..... .... ..... 1.8

Feb. 22, 1996 ..... .... 92.49 ..... .... ..... 1.7

Oct. 29, 1987 ..... .... 91.51 ..... .... ..... 5.0

Oct. 16, 1989 ..... .... 88.12 ..... .... ..... 3.4

Dec. 23, 1991 ..... .... 88.10 ..... .... ..... 3.0

Aug. 21, 1991 ..... .... 88.10 ..... .... ..... 3.0

May 31, 1995 ...... .... 86.46 ..... .... ..... 2.2

April 5, 1994 ..... .... 82.06 ..... .... ..... 2.3

Aug. 27, 1990 .... ..... 78.71 ..... .... ..... 3.1

Jan. 4, 1988 ..... ..... 76.42 ..... .... ..... 3.9

Sept. 22, 1987 ..... ... 75.23 ..... .... ..... 3.0

Pub Date: 3/19/96

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