It was another ho-hum, routine day on Wall Street, with the Dow Jones industrial average soaring to new heights for the eighth time in February`s 11 trading days. It was the fourth record close in a row.
The closely watched average started the day sharply lower, then changed direction and took off, with only a mild correction late in the session. The Dow gained 14.33 to close at 1678.78.
Big Board volume totaled 160.2 million shares, up from 139.92 million in the previous session. Nationwide turnover in NYSE-listed issues totaled 189.74 million shares. The NYSE composite index rose 1.45 to 128.10
Standard & Poor`s index of 400 industrials rose 2.68 to 244.89, and S&P`s 500-stock composite index was up 2.69 to 222.45.
Different groups of stocks seem to take their turns leading the charge, and Tuesday appeared to be the day for high-technology issues.
International Business Machines closed up $2.62 at $158.87. Honeywell, another computer manufacturer, was up $3.75 at $83.12. Digital Equipment was up $4.37 to $161.50 after a favorable article in this week`s Barron`s magazine.
Oil stocks were mixed in response to the news that spot prices for crude oil dropped below $15 a barrel Tuesday for the first time since 1979.
Phillips Petroleum, Chevron, Texaco and Exxon were all higher, while Mobil, Pennzoil and Atlantic Richfield were off.
”It looks like more of the same. Very dull. It just keeps going up,”
joked Hildegarde Zagorski, an analyst with Prudential-Bache Securities Inc.
Expectations of lower interest rates and a general positive outlook among traders contributed to the surge. Traders also pointed to futures-related buy programs and a strong rally in bonds.
”The market just doesn`t want to quit,” said Harry Villec of Sutro & Co. in San Francisco. ”Interest rates are down, there may be a discount rate cut and oil prices are lower, all contributing to this bull market trend.”
Villec said there could be a correction at any time as a result of profit-taking. However, he added, any correction could be aborted in two or three days as buyers jump back into the market.
”There seems to be a further need to lower interest rates,” said Eugene Peroni, an analyst with the Los Angeles-based securities firm of Bateman Eichler, Hill Richards Inc.
He cited corporate earnings, which ”are not keeping pace with this market,” and national statistics that indicate the economy is not growing as fast as it could.
At the same time, he said falling oil prices should offset fears by the Federal Reserve Board that interest rate cuts might rekindle inflation.
Johnson & Johnson, maker of Tylenol, led the most-active list, up $1.37 to $49.12. The company announced Monday that it would stop selling medications contained in capsules.
Chicago-based Wm. Wrigley Jr. Co. was up $10.25 a share to $104.50 in light trading. Company officials said they knew of no reason for the jump.
Prudential`s Zagorski said the overall market was ”still strong” after starting off on the wrong foot and dropping more than $10 in a round of profit-taking following Friday`s record performance, which saw the Dow jump 19.38 to 1664.45. Monday was a holiday.
The dollar continued its sharp decline in active and volatile trading, falling against most major currencies after a short-lived rally against the Japanese yen. Dealers linked the drop to a perception that the Reagan administration wants the dollar to decline further.
Gold prices rose. Republic National Bank of New York said the metal was quoted at a bid price of $337.50 an ounce, up $3.75.
The dollar stemmed an eight-day slide against the yen in Tokyo, rising to 181.75 yen from 180.75 Monday. But the rally fizzled later in London, where the dollar fell back to 181.125 yen.
