Dow Rises 7 to Close at Record High : Lower Interest Rates and Falling Oil Prices Cited for Gain

February 12, 1986|Associated Press

NEW YORK — Stock prices moved higher today, climbing in afternoon trading after rising and slipping within a narrow range for much of the session.

The Dow Jones average of 30 industrials rose 7.11 to 1,629.93, breaking the record close of 1,626.38 set on Monday.

Gainers outpaced losers by about three to two on the New York Stock Exchange.

Big Board volume totaled 136.37 million shares, against 141.25 million in the previous session.

The NYSE's composite index rose 0.14 to 124.67.

At the American Stock Exchange, the market-value index was 0.44 higher at 244.12.

Oil prices fell sharply for much of the day on the spot and futures markets, sparking a bond market rally and improving the outlook for inflation, both developments which tend to spur the stock market.

But analysts said that just as in the previous session, the stock rally which advanced on lower interest rates and dropping oil prices was tempered by profit taking.

Although today's gain pushed the stock market back into the record altitudes it had reached in three of the past four trading sessions, on a percentage basis it was relatively small. Analysts said that indicated traders generally wanted to take a break from the market's five-month long rally and wait for profit taking to run its course before getting back into the market.

Bond prices chalked up more gains in early trading.

The Treasury's key 30-year bond rose about 1/2 point, or $5 for each $1,000 in face amount, by noontime in New York.

In the secondary market for Treasury securities, prices of short-term governments were unchanged to up 1/32 point, intermediate maturities rose from 5/32 point to 11/32 point and long-term issues moved up 1/2 point to 9/16 point, according to the investment firm of Salomon Bros.

The movement of a point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.

The Merrill Lynch daily Treasury index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, edged up 0.11 from late Tuesday to 111.30. The Shearson Lehman daily Treasury bond index, which makes a similar measurement, rose 1.76 to 1,167.78.

In corporate trading, industrials went up 3/8 point in heavy dealings and utilities rose point in light trading.

Among tax-exempt municipal bonds, revenue bonds and general obligations were up 3/8 point in moderate activity.

Yields on three-month Treasury bills dipped two basis points to 7.10%. Six-month bills held steady at 7.17% and one-year bills were also unchanged, at 7.18%. A basis point is one-hundredth of a percentage point.

Yields on 30-year Treasury bonds slid to 9.12% from 9.18% late Tuesday.

The federal funds rate, the interest on overnight loans between banks, traded at 7.813%, the same as late Tuesday.

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