Newspaper article THE JOURNAL RECORD

Blue Chips Again Set Record Highs

Newspaper article THE JOURNAL RECORD

Blue Chips Again Set Record Highs

Article excerpt

NEW YORK (AP) -- Blue-chip stocks marched to record highs for the third time this week as interest rates fell Thursday in bond trading spurred by more signs of a moderating economy that might keep inflation under control.

The Dow Jones industrial average rose 38.39 to 6,059.20, down slightly from a 45-point gain that briefly put the blue-chip average within 35 points of 6,100 just three days after its first close above 6,000.

The Standard & Poor's 500-list also notched its third new high this week, while the New York Stock Exchange composite index, also dominated by blue-chips and other larger companies, closed at record levels after a 10-day drought. The technology-dominated Nasdaq market retreated, however, pressured by more profit-taking in computer-industry names whose shares had rallied in advance of this week's strong earnings reports. With few eye-catching earnings reports like those that dominated the past two sessions, many investors focused on consumer product concerns such as Merck, Procter & Gamble and Philip Morris, whose fairly reliable revenues are looking increasingly attractive with each new hint of a moderating economy. The government offered several such suggestions Thursday morning, reporting that construction of new homes and apartments fell 6 percent last month to the lowest level of 1996, while industrial production inched up just 0.2 percent. Bonds rallied on the news, which reinforced other recent indications that robust demand is easing enough to contain inflationary pressures without an economy-slowing interest rate hike by the Federal Reserve. As bond prices rose, the yield on the 30-year Treasury bond -- a key determinant of corporate and consumer borrowing costs -- fell just below 6.80 percent from late Wednesday's 6.85 percent. Higher inflation or interest rates can make the fixed payoff on bonds less attractive, forcing down prices to improve the yield. …

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