Dow set for barrier assault

Press, 7 January 1987, Page 27

Dow set for barrier assault

NZPA-Reuter New York The Wai! Street stock market began 1987 in record-breaking style and seems set for an early assault on the elusive 2999-point barrier on the closely- watched Dow Jones industrial average. The Dow broke records on Monday jumping 44.01 points to 1971.32. That was well above the last record close of 1955.57 set on December 2 as investors insisted on taking an optimistic view for shares, even though many experts say the economy faces another sluggish year of moderate growth. The 44-point rise was also a record, exceeding the previous one-day record of 43.41 set on November 3, 1982, although market analysts said that that day’s rise was greater on a percentage basis. Analysts said the gains on Monday and last Friday totalling 75.37 points represent the biggest two-day advance in memory. The new Dow record comes after a series of all-time highs in 1986, a year which ended with the index gaining 22.58 per cent. The broad market also demonstrated its strength as advancing issues led declines by an eight-to-one margin. The volume of 182 million shares was nearly double what it was on Friday, the first trading day of 1987. Most analysts say the market can easily slice through the 2000 level for the first time in the days ahead, after staying in the 1900 to 1950 level for the past six months. The average first closed above 1000 points 14 years ago. “This is the real thing,” said Mr Larry Wachtel, of Prudential Bache Securities. “The market showed its explosive nature on the upside once the artificial pressue of tax-selling was lifted.” The market sagged in December under pressure from investors who wished to take advantage of special treatment of capital gains abolished in the tax reforms which took effect on January 1.