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Dow sets another record
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December 28, 1999: 6:41 p.m. ET
Blue chip components Alcoa, Philip Morris lift index; Nasdaq slips in late trade
By Staff Writer Jill Bebar
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NEW YORK (CNNfn) - U.S. blue chip stocks surged to a record close Tuesday, buoyed by solid gains from financial stocks and cyclicals. Technology stocks, which have been leading the market rally, closed mostly lower.
The Dow Jones industrial average rose 85.63 points, or 0.85 percent, to 11,476.71. The blue-chip index’s previous record close was 11,405.76 set last Thursday.
Breadth was positive on the New York Stock Exchange, with gainers narrowly beating losers 1,547 to 1,534. Trading volume was a moderate 660 million shares as many market participants have closed their accounts for the year.
The Nasdaq composite slipped 3.27 points to 3,972.11, snapping its seven-day winning streak. The S&P 500 index added 0.57 to 1,457.66.
Cyclical stocks, which move in tandem with the U.S. economy, led Tuesday’s blue-chip rally amid signs the economy remains robust.
Earlier, the Conference Board said December U.S. consumer confidence, an index of consumer sentiment, rose a 31-year high as Americans -- flush with rising real estate values, bulging stock portfolios and unparalleled confidence in their jobs -- revised their outlook for the economy heading into the millennium.
Separately, the National Association of Realtors said sales of existing homes rose 6 percent in November to an annual rate of 5.09 million units from 4.79 million in October. Analysts polled by Briefing.com had expected 4.90 million units.
Michael Moran, chief economist at Daiwa Securities, said if the economy continues to grow at the current pace, then the Federal Reserve will need to hike interest rates again next year to ward off inflation. (432K WAV) (432K AIFF).
Treasury prices were little changed Tuesday, with the benchmark 30-year bond losing 1/32 of a point in price, its yield unchanged from 6.47 percent late Monday.
In currency markets, the dollar rose against both the yen and the euro.
Cyclical stocks post gains
Among cyclical stocks, Alcoa (AA), International Paper (IP), Minnesota Mining and Manufacturing (MMM) and United Technoligies Corp. (UTX) posted solid gains.
Alcoa benefited from Scott & Stringfellow raising its earnings estimates for next year to $4.83 per share from $4.55. Alcoa, the world's No. 1 aluminum manufacturer, rose 3-1/2 to 81-9/16.
International Paper rose 1-1/16 to 55-5/16, 3M gained 3-1/8 to 96-7/8 and United Technologies advanced 3-3/16 to 64-3/16.
Tobacco stocks were mixed after the Florida Supreme Court said late Monday it declined to enter a landmark class-action lawsuit won by Florida smokers, leaving U.S. tobacco companies vulnerable to multibillion-dollar judgments
Philip Morris (MO), another member of the Dow industrials, contributed to the blue chip indicator’s gains. Stock in the world's largest tobacco company was one of the most actively traded on the New York Stock Exchange, climbing 5/8 to 22-1/8. But R.J. Reynolds Tobacco (RJR) declined 3/4 to 16.
The Nasdaq posted an intraday high of 4,022.51 -- the third time in a row the index traded above 4,000 level before falling back.
However, market strategists said it is only a matter of time before the Nasdaq closes above the landmark level.
"It’s just a matter of when and how much we blow through 4,000. We are not going to see anything resembling a pullback of significance in the Nasdaq,” said Bill Meehan, chief market analyst at Cantor Fitzgerald.
‘We’ll certainly close above 4,000 by year-end. Momentum players continue to buy the hot technology stocks,” said Bob Walberg, chief equity strategist at Briefing.com.
Within the sector, e-commerce stocks continued to garner investors’ attention. In particular, online prescription retailers were in focus after the Clinton administration announced its intention to impose regulations on sales of prescription drugs over the Internet.
The plan would require the sites to get approval from the Food and Drug Administration, giving the federal agency unprecedented new control over the drug-dispensing e-tailers.
Drugstore.com (DSCM) tumbled 3-9/16, or nearly 10 percent, to 32-7/16 and PlanetRx.com (PLRX) fell 1/4 to 14-9/16. But CVS (CVS), parent of CVS.com, rose 5/16 to 36-3/16.
Most tech bellwethers faltered. Intel (INTC) eased 2-1/16 to 83, Microsoft (MSFT) edged down 1-5/8 to 117-1/2 and IBM (IBM) slipped 3/8 to 109-3/8. However, Hewlett Packard (HWP) gained 2-13/16 to 111-5/16
(Click here for a look at today’s CNNfn hot stocks.)
(Click here for a look at today’s CNNfn technology stocks.) 
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