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Dow crashes through 7,000
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February 13, 1997: 5:27 p.m. ET
Strong rally in bonds carries bellwether to historic milestone
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NEW YORK (CNNfn) -- The most stunning bull run ever left Wall Street breathless again Thursday as the Dow Jones industrial average vaulted over the 7,000 mark for the first time.
Traders and investors ended the day shaking their heads in amazement as the blue-chip measure soared 60.81 points to 7,022.44. The gain brought the Dow's gain to 9 percent this year alone.
To put the power of the bull run in perspective, the Dow has knocked off four thousand-point milestones in just two years, surpassing 6,000 only four months ago and 4,000 two years ago.
Analysts said the long rally has been fueled by a flood of money into mutual funds -- some $27 billion was poured into the funds last month alone -- and no one was ready to predict when the bubble would burst.
"Seven thousand is a big dramatic figure, but it just confirms we're in a rising market and one, in my opinion, that's rather richly valued. Momentum is the key. And it just confirms the strong upward momentum in the market, Michael Metz, chief investment strategist at Oppenheimer, said.
New York Stock Exchange advances led declines, more than 2-1, as volume topped a whopping 589.9 million shares.
The broader markets also extended their record pace, with the S&P 500 adding 9.05 points to 811.82, and the NYSE Composite gaining 4.54 to 424.42.
The American Stock Exchange index rose 2.30 points to 595.40, while the Nasdaq Composite, which surged 27 points Wednesday, climbed 11.85 points to 1,370.81.
Joining the parade of record breakers was the Dow Transports, which drove up 16.33 to 2,363.24.
Stocks were powered by a steep slide in interest rates on bonds. Traders, relieved that the Treasury's auction came to an end, returned to the market with extra enthusiasm.
The price of the Treasury's benchmark long note rose 1 full point in price, slicing the yield to 6.63 percent.
Traders were also emboldened after the Commerce Department reported that retail sales rose a moderate 0.6 percent in January. The department also revealed that December sales proved more disappointing than previously reported, rising an anemic 0.3 percent.
That led investors to overlook a Labor Department report showing weekly initial jobless claims dipping to 309,000. Economists had anticipated the weekly reading to come in at 335,000.
For a second consecutive session, technology shares rebounded from a selloff that began earlier in the week. Intel (INTC) picked up 1/4 to 157; 3Com (COMS) rose 1-1/4 to 41-1/4; and IBM (IBM) gained 1-3/8 to 146-3/8. U.S. Robotics (USRX) jumped 3-1/2 to 62-3/8.
Shares of electro-optic maker Galileo (GAEO) fell off the edge, tumbling 11-3/4 to 6-7/8 after the company lost Xerox as a customer. Without Xerox, sales figures are likely to disappoint investors.
Elsewhere, Johnson & Johnson (JNJ) gained 1-1/8 to 61-3/4 on word the Prudential upgraded the stock because of a strong outlook for sales of its drugs used to treat ulcers and strokes.
That was part of a healthy rally in the sector. Bristol Myers Squibb (BMY) gained 2-5/8 to 134-1/2; Merck (MRK) surged 3-3/4 to 99-5/8; and Eli Lilly (LLY) jumped 2 to 92-1/2.
With the stock market showing few signs of weakness, investors pushed stocks of Wall Street securities firms higher. Merrill Lynch (MER) soared 8-1/2 to 96-1/2 after Goldman Sachs raised its rating on Merrill stock. Elsewhere in the sector, AG Edwards (AGE) added 1-3/8 to 39-1/8, and Salomon Bros. (SB) gained 1/2 to 59-7/8. Morgan Stanley (MS) rose 2 to 68-7/8. 
-- Scott Benjamin
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