Closing Market Report

Star-Bulletin news services

Friday, July 2, 1999

Dow up 72.82
to record as
jobless rate rises

NEW YORK -- Stocks rose to new records today as a strong employment report fed investors' enthusiasm and capped a week of extraordinary strength on Wall Street.

The Dow climbed 72.82 to close at 11,139.24, easily topping its previous record close of 11,107.19, set May 13. The Dow rose 586.68 points for the week, a gain of more than 5 percent and the biggest one-week gain in its 103-year history.

Broader stock indicators also moved higher, with the Standard & Poor's 500 index and the Nasdaq composite also achieving new closing highs.

The Standard & Poor's 500 rose 10.26 to 1,391.22, and the Nasdaq composite index rose 34.84 to 2,741.02.

Advancing issues outnumbered decliners by an 11-to-8 margin on the New York Stock Exchange, with 1,680 up, 1,224 down and 607 unchanged. NYSE volume totaled 589.12 million shares vs. 828.55 million yesterday.

The NYSE composite index rose 3.79 to 655.12, and the American Stock Exchange composite index rose 7.47 to 802.42. The Russell 2000 index of smaller companies rose 2.09 to 456.51.

Stocks climbed as the Labor Department said American businesses created a total of 268,000 new jobs in June, with all industries except manufacturing and mining posting solid gains. The increase in jobs was slightly stronger than economists expected, and average hourly earnings, a key gauge of inflation pressures, increased by 3.7 percent in June compared to a year ago.

The unemployment rate edged up slightly to 4.3 percent in June, the department reported. Unemployment in May had dipped to a 29-year low of 4.2 percent.

In a less-buoyant market, the report could have punctured investors' enthusiasm. Higher wages can drag earnings down because labor costs account for most of consumer prices. They also raise the specter of another increase in interest rates following this week's modest hike by the Federal Reserve.

But the bond market, which often sets the tone for stocks, was unmoved by the jump in wages.

"The markets blew right past it," said Ricky Harrington, technical analyst with Wachovia Securities in Charlotte, N.C. The yield on the benchmark 30-year Treasury bond remained steady at 6.0 percent, setting the stage for a sixth consecutive gain in the stock market.

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