Dow Takes A Twisting Path To New Record
The Dow Jones industrials and the Nasdaq market stumbled to record highs Monday, but a broad follow-through to Friday’s rally faltered as interest rates rose again in jittery bond trading.
The Dow Jones industrial average rose 23.09 to 6,567.18, surpassing Dec. 27’s all-time best finish at 6,560.91 despite retreating from a 75-point gain that had boosted the blue-chip barometer above 6,600 for the first time.
Broader measures ended mixed, pulling back with bonds as rising oil prices aggravated inflation concerns and growing challenges to Newt Gingrich’s reign as Speaker of the House spurred worries about continued deficit reduction.
Interest rates jumped in the bond market last week after some unexpectedly strong economic data raised concerns the economy hasn’t slowed enough to keep a lid on inflation, which can make fixed-income investments such as bonds less attractive.
Compounding investors’ inflation worries was the cold snap crossing the nation, which sent energy prices soaring in commodities trading.
Some of the stocks that moved substantially or traded heavily Monady:
NYSE
AT&T, down 1-7/8 at 39-5/8.
Two securities firms cut their earnings estimates for the company. Salomon Brothers and CS First Boston said the telecommunications giant will have to spend heavily to protect its ailing core longdistance business before the Baby Bells start offering long-distance service in 12 to 18 months.
General Motors, up 1-3/8 at 59-1/4.
Mascotech, up 1 at 17-3/4.
Smith Barney analyst David Garrity upgraded his investment ratings on the two companies to “buy” from “outperform,” the Dow Jones News Service reported. The analyst also said GM has been added to the firm’s recommended list.
Texas Instruments, up 5/8 at 67-5/8.
Raytheon, up 1/4 at 50.
Dallas-based TI agreed to sell its defense operations to Raytheon for $2.95 billion.
NASDAQ
Apple Computer, down 3-7/8 at 17-7/8.
Prudential Securities and Bear Stearns downgraded the stock after late Friday’s announcement that Apple will likely report a wider-than-expected loss for its first quarter ended Dec. 27. Apple, based in Cupertino, Calif., cited a 10 percent decline in revenues compared with the prior quarter, noting weakness in U.S. demand for the Performa line of consumer products.
Novadigm, down 2-3/4 at 6-1/4.
The maker of systems that automate the management of software within corporations will likely report a wider-than-expected loss for its fiscal third quarter ended Dec. 31. Novadigm, based in Mahwah, N.J., said orders from new customers for pilot projects had been smaller than expected.