John J. Edwards III
Time for a new benchmark.
Measuring the leaps of the mighty
Dow Jones Industrial Average
in 100-point increments just won't do anymore. It's getting silly. The blue-chip index first closed above 7100 a week ago, finishing at 7214.46 -- which took care of 7200 in the same fell swoop. And today's 123.63-point explosion to a record 7293.16 puts the Dow so close to 7300 it'll probably trip over it tomorrow.
also hit a record, up 12.88 to 837.66. Name almost any big-cap stock and it wore a jetpack today:
bounded 4 3/8 to a 10-year high of 171 7/8 and kept moving up after hours;
jumped 2 1/4 to an all-time high of 84 1/2;
, newly split 2-for-1, rallied 1 3/4 to a 52-week high of 60.
Smaller and high-tech issues also did well, but less dramatically. The
Nasdaq Composite Index
added 9.13 to 1344.18, weighed down by
, among others. The
Philadelphia Stock Exchange Semiconductor Index
declined sharply, off 6.18 to 308.91.
The big-cap surge came on modest volume, with 462.8 million shares changing hands on the
New York Stock Exchange
. Big Board advancers beat decliners by 1,766 to 760. On the Nasdaq, advancers led decliners by 2,302 to 1,880 on volume of 544.3 million shares.
"I hate to use such inelegant phrases as 'unbelievable,' but it does have a little touch of fantasy to it," said Hugh Johnson, chief investment officer at
, of the large-stock rally. "It is a little bit breathtaking."
But there's some method to this seeming madness, Johnson went on. "The bond market is stable, stock prices are rising," he said. "That's all because there's clear evidence that the economy is slowing to a very sustainable rate, and the
will not have to raise interest rates." The yield on the bellwether 30-year Treasury bond continued its downward journey, reaching 6.86%.
Joe Barsky, vice president and senior portfolio manager at
American Express Financial Advisors
in Minneapolis, said the ongoing skid of the dollar against the yen contributed as well. "The drop in the dollar has made people who were worried about earnings for multinationals being affected by the currency not so worried," he said. "You saw that especially affecting drug stocks today."
rose 2 3/8 to 92 5/8 and
Pharmacia & Upjohn
, which picked a new CEO yesterday, gained 1 5/8 to 33 3/4.
Barsky said the end of a surprisingly solid earnings period also has investors celebrating. "We were looking for a low-single-digit earnings gain this year, and we've had to raise our expectations," he said. American Express now expects 10% earnings appreciation this year.
Johnson, worried that stock values are outpacing even this strong earnings environment, is sticking to a 60% stock, 40% bonds allocation. "I'd like to have more in stocks, but I'm waiting for the stock market to give me a chance to buy," he said.
"A pint and a Whopper, please!" U.K. conglomerate
agreed to acquire
Smith's Food & Drug Centers
in a $720 million stock swap. Meyer is also to assume $1.3 billion of Smith's debt. The combined company will have 265 stores in 11 states. Smith's surged 3 3/4 to a 52-week high of 43 3/4 and Meyer moved up 3/4 to 42 5/8.
rollercoaster is on the way back up. The networking software company's shares were blasted down almost 60% Feb. 27 after
said it was considering developing features that would compete with Citrix's multi-user WinFrame software. Today, Citrix exploded up 13 3/8, or 69.9%, to 32 5/8 after Microsoft changed its tune and signed a licensing agreement with the company. Citrix, the most active stock on the Nasdaq, said it will get an initial $75 million in fees and up to $100 million in royalties from the deal. Microsoft was up 1 1/2 to 118 1/8.
. The four-month business-and-sports TV experiment of
came to its long-expected end with a $257.5 million sale to
. Paxson will take over the station's programming June 30, converting it from business and sports to infomercials and sports.
Sic transit gloria mundi
, sort of. Paxson tacked on 1/8 to 10 1/2, Dow Jones added 5/8 to 38 3/4 and ITT slipped 1/8 to 59 5/8.
The dispute between erstwhile would-be partners
CEO Ronald Allen surprised Wall Street with a sudden resignation, effective July 31. He will become a consultant and an advisory director. Maurice Worth, now the executive vice president of customer service, was named acting chief operating officer and will run the carrier until a new CEO is found. Delta gained 1/2 to 95.
inched down 3/8 to 96 1/4 after
downgraded the stock to outperform from strong buy on valuation. The firm nevertheless raised its price target to 104 from 94, noting that Cat has rolled up 55% since July but still has farther to go.
rose 1 5/8 to 63 5/8. The company signed a contract to provide its Dynamic Equipment Sharing software to
TU-KA Cellular Tokyo
rose 2 to 33 3/8 after it announced that it will slim down to 50 facilities from 80. The company plans to take a $100 million second-quarter charge for the restructuring, which it expects to boost its gross margin to 28% by 1999 from 25% last year.
leapt 1 1/2 to 10 3/4 after
upgraded the stock to strong buy from buy.