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Dow Jones index storms to new high

NEW YORK: The Dow Jones industrial average rose to a record Wednesday as blue-chip stocks extended their winning streak into a third consecutive session on optimism about first-quarter corporate earnings.

The Dow index rose 18.06 points to 5,689.74, surpassing the previous record of 5,683.60 reached March 18 and setting its 19th record close so far this year. It gained a total of 85 points on Tuesday and Monday.

The NYSE composite index also set a new high.

In the broader market, however, declining issues led advances 1,186 to 1,076 on moderate volume of 386 million shares on the New York Stock Exchange.

"This stock market has a lot going for it. I think 6,000 (for the Dow index) is easy this year, and we'll probably go beyond that," said Tom Carpenter, chief economist of ASB Capital Management Inc.

"Investors at this juncture are willing to attribute earnings shortfalls for the first quarter to blizzards, the GM and federal government shutdowns and other one-time events."

Trading was overshadowed by news that a military plane carrying Commerce Secretary Ron Brown and a group of business leaders crashed in Croatia.

A full-scale search at the crash site near the city of Dubrovnik was under way for survivors. Brown had been leading a delegation of senior businessmen on a commercial mission to discuss reconstruction projects in Bosnia.

On the New York Stock Exchange, shares of bellwether International Business Machines Corp. rose 2-1/2 to 119-7/8, adding to Tuesday's gain of 7-1/4 on bullish comments by Lehman Bros. about prospects for the computer maker's mainframe products.

"IBM is leading the group. It's encouraging and there's a lot of focus on computer stocks which investors hope bottomed out in the first quarter," said Eugene Peroni, chief technical analyst with Janney, Montgomery Scott.

Technicians said IBM, like the Dow index, was testing some upside resistance after the recent surge.

The technology laden Nasdaq Composite index rose 4.56 points to 1,115.85, just shy of its record close of 1,117.79 set Feb. 23.

The next key report for the markets will be the key March jobs data set for release Friday. Stock markets will be closed in observance of Good Friday but the bond market will have an abbreviated session.

Wall Street expects non-farm payroll to increase by 60,000 in March after soaring by 705,000 the previous month.

The February jobs data triggered a 171-point plunge in the Dow Jones index in early March as the jump dashed hopes of another interest rate cut by the Federal Reserve.

"The employment report is crucial and will set the tone for next week's market," said Hugh Johnson, chief investment officer at First Albany.

"Stocks haven't given up the idea that later this year we may get more cuts in short-term interest rates. If we get a soft employment report, which I suspect we will, I suspect bonds will do better as well," Carpenter said.

Meanwhile, the 30-year Treasury bond slipped 10/32, raising its yield to 6.63 percent from 6.60 percent at Tuesday's close. The market fell after a top Bank of Japan official hinted that Japanese rates may soon be on the rise.

Bank of Japan Gov. Yasuo Matsushita said rising Japanese interest rates were natural in an economic recovery.

The shares of casino companies again drew strong buying on speculation that ITT Corp. and Hilton Hotels Corp. are shopping for gaming companies to expand their operation. Both companies declined comment.

Bally Entertainment rose 1/8 to 21-3/4 after rising 3-5/8 Tuesday on rumours that ITT and Bally were in high-level talks. Showboat jumped 2-5/8 to 29-7/8 and Harrah's Entertainment added 3 to 32-1/2.

The Standard & Poor's composite index of 500 stocks rose 0.62 of a point to 655.88. The American Stock Exchange index was up 1.67 to 574.32.

The NYSE Composite index of all listed common stocks rose 0.21 to 351.81, a record. The average share was up 2 cents.

The Wilshire Associates Equity Index - the market value of NYSE, American and Nasdaq issues - was 6,455.487 up 6.418 or 0.10 percent.-Reuter