NEW YORK — The stock market kept its early 1985 rally in high gear Wednesday with a broad advance that carried some leading indexes to record levels for the third straight session.
Analysts said good news on economic growth, inflation and interest rates helped to reinforce optimism among investors.
The Dow Jones average of 30 industrials jumped 15.23 to 1,274.73, moving within striking distance of its all-time closing high of 1,287.20 set Nov. 29, 1983.
In the last three weeks the average has soared 84.91 points.
Volume on the New York Stock Exchange came to 144.43 million shares, against 174.77 million Tuesday.
Analysts said economic statistics continued to paint a positive picture of growth in business activity with inflation rates remaining low.
The government reported Wednesday morning that the consumer price index rose 0.2% last month. That put the inflation rate, as measured by the CPI, at 4% for 1984, after readings of 3.9% in 1982 and 3.8% in 1983.
On Tuesday, the Commerce Department raised its estimate of economic growth for the fourth quarter of 1984 to a 3.9% annual rate, after adjustment for inflation. Previously, it had issued a "flash" estimate of growth at a 2.8% inflation-adjusted annual rate.
For good measure, interest rates declined in the credit markets Wednesday. Prices of long-term government bonds, which go up when rates fall, showed gains approaching $5 for every $1,000 in face value.
Peter Furniss of Shearson Lehman/American Express said that institutional investors have started to revise portfolios, switching out of defensive issues such as foods and tobacco and into technology and other sectors that can benefit from a growing economy.
He said money has been coming off the sidelines and "I look for it to continue." With rates on short-term cash coming down to the 8% area, Furniss said, "the public is looking for an alternate investment."
Thomas Ryan of Kidder, Peabody said reports that Fed Vice Chairman Preston Martin felt that there was room for interest rates to drop further helped trigger the last-minute rally.
Phillips Petroleum rose 1 1/2 to 47 1/2 in active trading, on top of a 1 3/4-point gain Tuesday. There was speculation about a possible new takeover bid for the company, but the word from Phillips was that it knew of no reason for the heavy trading in its stock.
International Business Machines, also active, picked up 2 7/8 to 132 1/2, flirting with its all-time high of 134 reached in 1983.
Among other leading blue chips, American Express gained 1 1/2 to 40; General Electric 1 5/8 to 64, Eastman Kodak 1 to 72 and American Telephone & Telegraph 5/8 to 21 5/8.
The auto stocks were especially strong as the domestic car makers posted their best sales rate for mid-January since 1973. General Motors rose 1 3/8 to 84, Ford Motor 1 1/2 to 51 and Chrysler 1 5/8 to 35 3/8.
Hewlett-Packard led the active list, down 1 at 33 7/8. Company officials told securities analysts that U.S. order rates remained sluggish.
In the daily tally on the Big Board, more than two issues rose in price for every one that fell. The exchange's composite index, up 0.99 at 102.27, hit a new high for the third straight session.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 169.57 million shares.
Standard & Poor's index of 400 industrials rose 2.13 to 198.68, and S&P's 500-stock composite index was up 1.82 at a record 177.30.
The NASDAQ composite index for the over-the-counter market added 2.30 to 270.72.
At the American Stock Exchange, the market-value index closed at 219.20, up 1.88.
On the Amex, Wang Laboratories class B was the most active issue, up 3/8 to 27 1/8. Ultimate Corp. was second, up to 10. Amdahl was third, unchanged at 15 3/8.
The Wilshire index of 5,000 equities closed at 1,813.755, up 17.144.
Large blocks of 10,000 or more shares traded on the NYSE totaled 2,882, compared to 3,431 Tuesday.
In the credit markets, bond prices rose in active trading.
Yields on 30-year Treasury bonds fell to 11.33% from 11.36% late Tuesday and 11.53% at the end of last week.
The Treasury sold $9.02 billion in two-year notes Wednesday at an average yield of 9.83%, down from 9.92% at the end of December. It was the lowest average yield at a two-year note auction since a similar issue sold for 9.61% on May 2, 1983.
In the secondary market for Treasury bonds, prices of short-term governments rose 2/32 point, intermediate issues rose point and long-term issues climbed as much as 10/32 point, according to the investment firm of Salomon Bros. Inc.
The movement of a point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.
In corporate trading, industrials and utilities rose 1/2 point in moderate trading.
Among tax-exempt municipal bonds, general obligations rose point in moderate activity and revenue bonds were up 3/8 point in heavy trading.
Yields on three-month Treasury bills slipped 6 basis points to 7.61%. Six-month bills fell 1 basis point to 7.89% and one-year bills were off 1 basis point at 8.22%. A basis point is one-hundredth of a percentage point.
The federal funds rate, the interest on overnight loans between banks, traded at 8.475%, up from 8.25% late Tuesday.