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Dow Tops 9,900 But Ends at 9,897.44

March 12, 1999

NEW YORK (AP) _ The Dow Jones industrial average hurtled toward 10,000 Thursday, falling just short amid a big gain in oil stocks and fresh evidence about the hardy U.S. economy.

The Dow broke through the 9,800 and 9,900 marks by noon, peaking at 9,935.46 before pulling back. A late rally failed to breach the five-digit milestone.

At the close, the Dow, a market bellwether which measures the value of 30 of America’s corporate icons, was up 124.60 to 9,897.44, a new high for the second day in a row. The Dow is up nearly 8 percent on the year and has gained more than 200 points in the past two days.

Broader stock measures also were up. The Standard & Poor’s 500-stock index rose 10.84 to 1297.68, just missing its first close above 1,300. The technology-heavy Nasdaq composite index rose 6.25 at 2,412.25.

Oil stocks were sharply higher following reports that leading exporting nations are close to agreement on production cuts in a bid to shore up prices. Although crude oil futures prices fell Thursday, prices have been rising steadily for more than a week, recovering from 12-year lows and pushing oil stocks higher.

That helped the Dow, which includes Chevron, which gained 1 13/16 to 85 1/16, and Exxon, which rose 1 7/16 to 74 3/4.

Investor interest in the 10,000 mark for the Dow also seemed to be feeding on itself.

``In the short term, at the margins, traders feel its inevitable that we will go to 10,000 and they are playing that dynamic to push the Dow higher,″ said Richard Cripps, chief market strategist for Legg Mason of Baltimore.

The biggest Dow gainer was American Express, which rose 5 7/8 to 123 1/2 after Donaldson Lufkin & Jenrette Securities raised its investment opinion of the stock.

The broad stock indicators were driven higher even without the usual help from technology stocks, which were mixed.

``The more (business) sectors that participate in a market advance is a sign the market looks very good,″ Cripps said.

But Cripps cautioned that many small-company stocks are still struggling, always a concern about the strength of any stock rally

Also helping Thursday’s rally was new retail sales data showing the U.S. economy is growing without any inflationary threats. Since there are no signs that the economy is overheating, investors believe that the Federal Reserve Board will have little reason to boost interest rates in coming months. Higher interest rates increase the cost of borrowing for consumers and corporations and as a result can cool economic growth.

The Commerce Department reported that retail sales_ which represent about a third of the nation’s economic output _ rose 0.9 percent gain last month to a seasonally adjusted $236.5 billion. That came on top of robust gains in January and December.

Separately, the Labor Department said that first-time claims for unemployment checks remained under 300,000 for the sixth consecutive week for the first time since 1974.

The abrupt resignation of Germany’s finance minister, Oskar Lafontaine, was also seen by some as a positive development. Some of Lafontaine’s policies, such as proposals for high taxation, were seen as harmful to businesses.

Advancing issues outnumbered decliners by a 7-to-5 margin on the New York Stock Exchange.

NYSE volume totaled 902.62 million shares vs. 832.59 million in the previous session.

The NYSE composite index rose 5.19 to 611.67 , and the American Stock Exchange composite index rose 6.51 to 721.65.

The Russell 2000 index of smaller companies fell 0.04 to 401.08.

Overseas, Japan’s Nikkei stock average rose 0.14 percent, Germany’s DAX index rose 0.7 percent, Britain’s FT-SE 100 rose 1.5 percent to a new record, and France’s CAC-40 rose 0.5 percent.

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