Newspaper article THE JOURNAL RECORD

Dow Jones Average Propelled Past Point before '87 Crash

Newspaper article THE JOURNAL RECORD

Dow Jones Average Propelled Past Point before '87 Crash

Article excerpt

NEW YORK - Optimism about interest rates sent stock prices sharply higher Tuesday and propelled the Dow Jones industrial average past the point where it stood before the October 1987 Wall Street crash.

The Dow Jones average, which reflects the performance of 30 blue-chip industrial stocks, rose 38.04 to close at 2,256.43.

Tuesday's session was the first time since the crash that the widely-followed index closed above 2,246.74, its finish on Oct. 16, 1987, the last trading day before the market collapsed and the average plunged 508 points.

Prices have surged higher on Wall Street over the last 10 weeks, with momentum building as more and more investors jumped into the market for fear of missing out on the rally.

That was the case again Tuesday, said Alfred E. Goldman, a market analyst with A.G. Edwards & Sons Inc. in St. Louis.

``You experienced a mini buying panic,'' Goldman said. ``You could almost sense institutions with large sideline cash saying, `oh my gosh, I'm going to miss the boat.'''

The catalyst for the latest session's gains was congressional testimony by Federal Reserve Board Chairman Alan Greenspan.

Jack Barbanel, an analyst with Gruntal & Co., said the financial markets were reassured by statements by Greenspan that indicated he was satisfied with Fed policy on interest rates. The markets believed that meant there would not be further tightening of credit, Barbanel said.

The dollar and Treasury bonds moved higher in response to Greenspan's testimony, with the stock market following suit.

Goldman said Greenspan's remarks could be interpreted as either positive or negative, ``But since the bond market rallied, it points out at this moment, market participants have a bullish mind set.''

The Treasury's closely-watched 30-year bond was up more than $8. …

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