NEW YORK — The stock market celebrated Columbus Day with a broad rally Monday that carried the Dow Jones industrial average to a 2 1/2-month high.
Trading was light, with many investing institutions, all government markets, the Coffee, Sugar & Cocoa Exchange and most banks closed for the holiday. But stock prices advanced steadily from the opening bell and picked up momentum near the close.
The Dow Jones's average of 30 industrials climbed 14.79 points to 1,354.73, its highest close since it stood at 1,355.62 on Aug. 1. Its record closing high of 1,359.54 was set July 19.
Volume Drops Off
Other, broader market measures also turned in strong showings.
Volume on the New York Stock Exchange dropped off to 78.54 million shares from 96.37 million Friday.
Analysts said many investors were impressed with the market's showing late last week, when it moved up despite International Business Machines' report of lower earnings for the third consecutive quarter.
To some observers, that suggested that the market was less vulnerable to disappointing news on corporate profits than it had been for some time.
Brokers said the significance of the advance, strong as it was, was open to debate because of the absence of so many regular market participants. They said today's session might well serve as a meaningful test of the rally's durability.
IBM shares led the market higher in Monday's trading, jumping 2 3/8 to 128. Among other blue-chip and technology stocks, General Electric gained 1 to 59 3/4, Minnesota Mining & Manufacturing 1 3/8 to 77 7/8, Digital Equipment 1 3/8 to 107 1/2 and Hewlett-Packard 1 to 31.
General Foods rose 3/4 to 119 1/2. Philip Morris said that the legal 15-day waiting period had passed for its $120-a-share tender offer to acquire General Foods and that no inquiries on antitrust matters had been received from government regulators during that time.
International Multifoods climbed 3 3/4 to 41 1/2. The NYSE said the company declined comment on recent activity in its stock, which has been ascribed to takeover rumors and speculation.
Beatrice, also recently rumored to be a possible takeover candidate, gained 1 to 42 1/2.
Chase Manhattan, which reported sharply higher third-quarter profits, added 1 to 54 7/8. Other bank stocks advanced as well, with Citicorp up 1 at 44 and J. P. Morgan up 1 1/8 at 50.
Dorsey Corp. rose 1 1/2 to 34 1/8. The company reported third-quarter profits of 91 cents a share, up from 57 cents in the comparable period last year.
The daily tally on the Big Board showed more than two issues rising in price for every one that declined. The exchange's composite index was up 1.08 at 107.64.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 92.75 million shares.
Large blocks of 10,000 or more shares traded on the NYSE totaled 1,744, compared to 2,121 on Friday.
Standard & Poor's index of 400 industrials rose 2.30 to 207.94, and S&P's 500-stock composite index was up 2.09 at 186.37.
The Wilshire index of 5,000 equities closed at 1,911.716, up 19.106.
The NASDAQ composite index for the over-the-counter market gained 2.50 to 284.25.
At the American Stock Exchange, the market-value index closed at 224.18, up 1.37.
In the credit markets, prices of tax-exempt bonds edged higher in holiday-shortened activity.
The government bond market was also closed in observance of Columbus Day.
In corporate trading, industrials and utilities were unchanged.
But among tax-exempt municipal bonds, general obligations and revenue bonds were up 3/8 point.
The federal funds rate--the interest on overnight loans among banks--traded at 7.875%, unchanged from late Friday.