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Wall St. reaches records
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July 2, 1999: 5:08 p.m. ET
Stocks end pre-holiday week with Dow, Nasdaq, S&P 500 at new highs
By Staff Writers Malina Poshtova Zang and Robert Scott Martin
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NEW YORK (CNNfn) - A week of interest rate excitement and strong earnings expectations was crowned with a triple record on Wall Street Friday, as the Dow industrials, the Nasdaq Composite and the S&P 500 index all climbed to levels never reached before.
The Dow Jones industrial average gained 72.82 points, climbing to a record 11,139.24, well beyond its previous closing high of 11,107. On the New York Stock Exchange, advances led declines 1,688 to 1,228 in light trading volume of 589 million shares.
Achieving its largest weekly point gain in history, the Dow advanced 5.56 percent from Monday to Friday, increasing its gain for the year to 21.32 percent.
The Nasdaq Composite, also setting a weekly point-gain record, climbed 34.84, or 1.3 percent, to 2,741.02 and the S&P 500 index rose 10.26 to 1,391.22, both also setting new highs.
The Nasdaq racked up 7.38 percent this week, its gain for the year rising to 25.01 percent. The S&P 500 index gained 5.77 percent and is now up 13.18 percent for the year.
Stocks rose every day of the week, as investors first braced themselves for and later celebrated an expected small interest rate increase by the Federal Reserve. When the Fed raised the federal funds rate by a quarter of a percentage point Wednesday and shifted its bias to neutral -- signaling no more rate hikes in the near future -- Wall Street responded with a rally.
Interest rate relief and expectations of mostly positive corporate earnings surprises kept the market going higher for the rest of the week.
Bonds drifted back toward unchanged levels before closing early for the Independence Day holiday as investors shook off news of stronger than expected June job growth and May factory orders. The economy created 268,000 non-farm jobs last month, well above the 220,000 economists had predicted, while orders from U.S. factories climbed 1.1 percent. The bellwether 30-year Treasury bond was flat in price, for a yield of 6.00 percent.
All U.S. financial markets will be closed Monday in observance of the Independence Day holiday.
The dollar moved higher against the yen and barely budged against the euro.
Pre-holiday rally
The impending long weekend kept trading in the stock market limited Friday, with many investors already gone for the holiday. In their wake, transportation, manufacturing and finance stocks kept the broader market aloft.
The Dow transports led the way, surging 49.39 points, or 1.4 percent, to 3,515.99 as investors scooped up airline shares.
American Airlines parent AMR (AMR), which said Friday it expects "a busy summer for the whole industry," added 2-7/8 to 72-9/16. US Airways (U) shares climbed 11/16 to 46-11/16 and Delta Air Lines (DAL) gained 1-3/4 to 61-1/16.
Among the major finance stocks, Dow component American Express (AXP) rose 4-1/2 to 137-5/8, while fellow blue chip J.P. Morgan (JPM) climbed 1-5/8 to 141-7/8 and Citigroup (C) added 7/16 to 48-15/16.
But it was the manufacturing sector that gave stocks their real upward power. After the factory orders report, industrial stocks surged, with 3M (MMM) gaining 1-11/16 to 88-7/8 and Caterpillar (CAT) adding 3/4 to 61-15/16 on the Dow. International Paper (IP) climbed 1-1/4 to 51.
Warnings, deal buzz add spice
Otherwise, the few market participants left on Wall Street appeared to shrug off the strong jobs data and focus instead on the second-quarter earnings reporting season, due to begin in earnest in the second and third weeks of July.
Shares of hotel and casino operator Mirage Resorts (MIR) tumbled 1-1/2, or almost 9 percent, to 15-1/4 as investors showed their disappointment with the company's warning that second-quarter results will be sharply below expectations. The company blamed tough competition, disappointing winnings at its gambling tables and the expenses for opening two new resorts. Bear Stearns lowered its rating on the stock to "neutral" from "attractive," and Deutsche Bank Alex. Brown downgraded it to "market perform" from "buy."
HA-LO Industries (HMK) shares also suffered, plunging 3-13/16, or more than 38 percent, to 6-1/16. The promotional products firm said Thursday that slowing growth in some markets would cause second-quarter profits to come in at 2 cents per share, far below estimates of 17 cents. Among the Wall Street research firms voicing their displeasure at the news, ABN Amro and Morgan Stanley both cut their enthusiastic recommendations on the stock to "outperform."
Among the day's deals, shares of Scotsman Industries (SCT) leapt 10-13/16, or nearly 50 percent, to 32-5/8 after British kitchen-equipment maker Berisford (BRFD(London)) said it would buy the refrigerator maker for $712 million in cash. Berisford shares are not traded in the United States.
Finally, Western Wireless (WWCA) shares surged 2-15/16, or nearly 10 percent, to 33-1/2 on unsubstantiated rumors that Dow communications giant AT&T could be looking to buy the rural wireless-telephony provider.
(Click here for a look at today's list of CNNfn market movers.)
(Click here for a look at today's CNNfn technology stocks report.)
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