The roaring bull market that has investors spellbound raced to new heights yesterday as the Dow Jones industrial average burst through the 8,000 mark for the first time.
News of high company profits, tame inflation and low interest rates ignited a buying frenzy on Wall Street.
The Dow -- the index made up of 30 bellwether companies -- rose 63.17 points to finish at 8,038.88 -- its 32nd record close of the year.
And the hot Nasdaq composite index, made up of scores of high-tech companies, had its biggest point-gain ever, shooting up 38.52 points to close at a record 1,580.60 points. In the last 10 trading days alone, Nasdaq is up 113.02 points, the equivalent of nearly 600 Dow points.
"It is amazing," said Mark Vitner, economist with Charlotte-based First Union Capital Markets Group. "I admit, I scratch my head."
The market is "just rolling right now," said David M. Citron, who manages a $170 million portfoliofor Baltimore-based Wagner Citron Management Corp. "Why couldn't the Dow be up another 400 or 500 points? I wouldn't even try to guess how far it is going to go because the liquidity is there, the momentum is there."
The Dow has now doubled in less than 2 1/2 years. It has added nearly 1,600 points, or nearly 25 percent, this year, nearly matching last year's 26 percent gain and far more than what most analysts had predicted for all of 1997.
It took the Dow about five months to race from 7,000 points in February to 8,000 points, after taking about four months to move from 6,000 points in October to 7,000.
Ralph J. Acampora, head of technical research at Prudential Securities Inc., and one of the most bullish bulls on Wall Street, has said the Dow will hit 10,000 by June.
Some analysts say the latest rally is being fueled in part by people who have been on the sidelines, and are suddenly throwing money into stocks.
"Now it seems there is a rush to buy stocks," Vitner said. "If you don't buy it today, the price is going to get higher."
It was that kind of thinking that caused booms and busts in the prices of farm land in the 1970s and commercial real estate in the 1980s, Vitner said.
"I fear that is what we are seeing in the stock market," he said.
Vitner said Federal Reserve Chairman Alan Greenspan is "going to have to address this run-up in some context."
"Higher stock prices are preferable to lower ones, but the recent run-up may have been a bit too much," Vitner said.
