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Dow Caps Week With New High; Bond Losses Up

November 09, 1996|From Times Wire Services

A late wave of bargain hunting erased some modest losses Friday, capping off a powerful Election Week rally with more record highs for the Dow Jones industrial average and other major stock measures.

The Dow, which closed above 6,200 for the first time on Thursday, rose 13.78 points to a new high of 6,219.82, rebounding from a 15-point deficit over the last hour. It was the fifth straight winning session for the Dow, which gained 197.89 points, or 3.3%, on the week.

The Standard & Poor's 500-stock index and the New York Stock Exchange composite index closed at new highs for the fourth straight day, while the Nasdaq composite index moved within a point of its first record close since mid-October.

Stocks were pressured most of the session by a weak bond market, which provided an excuse for investors to lock in some profits on the big advance spurred by Tuesday's election results. The strength of that rally was unexpected by many analysts, because voters served up few surprises at the polls.

Bond losses steepened Friday after September wholesale inventories fell 1.3%, the biggest drop since the 1.6% fall in February 1982. The data suggested inventories are fairly lean and could lead to a production pickup in the fourth quarter.

The price of the Treasury's main 30-year bond was down 17/32 point, driving up its yield to 6.57% from 6.53% on Thursday.

But the enthusiasm over at least two more years of a Democratic presidency and a Republican-led Congress--a winning combination for stocks thus far--has made money managers and traders hesitant to risk missing the next advance. So when stocks didn't drop more sharply as bonds fell Friday, many people viewed the small dip as a buying opportunity, analysts said.

"It shows you the amount of money that's out there waiting to come in," said Richard A. Dickson, a technical analyst at Scott & Stringfellow in Richmond, Va.

Advancing issues outnumbered decliners by a 6-5 margin on the New York Stock Exchange, and the S&P 500 rose 3.17 points to 730.82, the NYSE's composite index rose 1.41 points to 386.32, and the American Stock Exchange's market value index rose 1.14 points to 580.39.

The Nasdaq composite index rose 3.37 points to 1,257.51, just shy of the Oct. 15 record of 1,258.10, as several bellwether technology issues recovered from the day's early profit-taking. Intel rose 1/8 to 122 1/4, Microsoft was unchanged at 143 1/2 and Cisco Systems rose 1/4 to 64 3/4.

Among Friday's highlights:

* The Dow's strongest issues were Merck, up 1 1/4 at 80 1/2, and other drug issues also gained, including Pfizer, up 1 1/4 to 90, and Eli Lilly, up 1 1/8 to 77 3/4.

* Conrail rose 3 1/4 to 96 1/4 after receiving a sweetened hostile $110-a-share takeover bid from Norfolk Southern, whose stock lost 3/8 to 86 5/8.

* Shares of liquor companies advanced after a trade group decided to lift a self-imposed ban on television and radio advertising.

Seagram, distiller of Chivas Regal, rose 1 1/8 to 38 5/8. Brown Forman, which makes Jack Daniels, rose 1 1/8 to 45 3/8. American Brands, the leading distiller in the U.S. and maker of Jim Beam, fell 1/4 to 49 1/4.

* Mossimo shares fell 25%, dropping 5 3/8 to 16 1/2, after the sportswear maker reported lower-than-expected third-quarter earnings because of higher costs to market its fall collection.

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