Friday, December 25, 1998

Dow edges 16 points higher, extending win streak to six sessions

By BRUCE MEYERSON

Associated Press

NEW YORK -- The Dow edged closer to new highs, but many stocks sagged Thursday as investors opted to take some of their big gains home for the holiday.

The Dow Jones industrial average rose for a sixth straight session, but was just 15.96 higher at 9,217.99 by the early 1 p.m. EST close for Christmas Eve.

Still, including Wednesday's 157-point romp, the Dow has tacked on 427 points during that winning streak, rapidly closing the gap from its Nov. 23 record of 9,374.27.

Broader stock indicators finished mixed in very thin trading, with many traders skipping the shortened session altogether.

The Standard & Poor's 500 fell 2.27 to 1,226.27 despite flirting with a fourth straight record high for much of the day. The technology-heavy Nasdaq composite index fell 9.51 to 2,163.03 surging 51 points to a new high on Wednesday.

Smaller-company stocks fared slightly better for once, with advancing issues outnumbering decliners by a small margin overall.

The past week's gains have been largely the result of seasonal factors, particularly year-end portfolio polishing by money managers and heavy flows of new capital from holiday bonuses and contributions to retirement plans.

"The market's just ignoring a lot of potential negatives," said Ricky Harrington, a technical analyst at Interstate/Johnson Lane in Charlotte, N.C., noting that nearly a third of the 30 stocks in the Dow have warned of disappointing profits in recent weeks.

"Window-dressing is just the dominating influence here," said Harrington. Mutual fund managers and other money managers "are obviously buying Cisco Systems, IBM, Intel and Microsoft because they would like to show big positions in these winning stocks at year-end."

While some of those big winners pulled back on Thursday -- Cisco Systems fell 2 5/16 to 94 3/16 to lead the Nasdaq retreat -- the losses were marginal compared with the gains of the past week. In fact, Intel was unchanged at 125, while IBM rose 2 15/16 to 187 15/16 as the strongest issue in the Dow, which gained of 314.36 for the week.

With just four sessions left in 1998, the Dow is now up 16.6 percent, while the S&P 500 is up 26.4 percent and the Nasdaq composite index is 37.7 percent. Less than three months ago, the Dow was showing a loss for 1998 and threatening to plunge below 7,400.

Advancing issues outnumbered decliners by a 10-to-9 ratio on the New York Stock Exchange, while Nasdaq gainers led by a slightly larger margin.

The Russell 2000 index of smaller companies rose 0.77 to 405.56, the NYSE composite index rose 0.12 to 589.07, and the American Stock Exchange composite index rose 1.71 to 666.49.

NYSE composite volume totaled 328.54 million shares at the 1 p.m. close, down from 494.46 million at the same time on Wednesday.

Overseas, Japan's Nikkei stock average fell 0.5 percent, while Britain's FT-SE 100 fell 0.4 percent. German and French financial markets were closed for a national holiday.

Meanwhile, in another sign that the economy remains strong in the face of weak export demand from shaky markets abroad, the government reported that Americans' personal income surged in November.

The 0.5 percent gain, the largest in nine months, followed respectable gains of 0.4 percent in October and 0.3 percent in September, the Commerce Department said.

Separately, the Labor Department reported that the number of Americans filing applications for unemployment benefits fell by 13,000 to 287,000 last week, the lowest level in a year and a half.