Dow Sets Post-Crash Record, Rises 12.86; Job Report Awaited

Stock prices climbed today to their highest levels since the October, 1987, crash as traders awaited the government’s monthly report on the employment situation.

The Dow Jones average of 30 industrials rose 12.86 to 2,190.54, surpassing its 1988 closing high of 2,183.50 reached on Oct. 21.

Advancing issues outnumbered declines by about 4 to 3 on the New York Stock Exchange, with 821 up, 604 down and 512 unchanged.

Big Board volume totaled 174.04 million shares, against 149.70 million in the previous session.

The NYSE’s composite index gained .43 to 157.49.

The report due Friday from the Labor Department on employment for December is expected to show continued strength in the economy.

Credit Tightening

That presumably would give the Federal Reserve extra cause to consider a further tightening of credit in its campaign to keep inflationary pressures from reviving.

The Fed is thought by some analysts to have pulled in the reins a bit this week in anticipation of the employment report.

But the bond and stock markets have held their ground in the first few sessions of the new year, suggesting that investors have already taken the prospect of tighter credit into account.

Analysts also said stocks appeared to be benefiting from buying by investing institutions seeking to put some of their large cash reserves to work at the start of a new year.

They noted a substantial pickup in trading volume, which has been very sluggish of late.

Bond prices were mixed in light early trading today. The Treasury’s closely watched 30-year bond was unchanged, with its yield holding at 9.08%.

Analysts said investors appeared to be ignoring the dollar, which continued to strengthen this morning in the wake of political tension between the United States and Libya. The dollar is viewed as a safe haven and traditionally rises in times of political turmoil.

In the secondary market for Treasury bonds, prices of short-term government issues were down between 1/8 point and 3/16 point, intermediate maturities had lost between 3/16 point and 1/4 point and long-term issues were unchanged to 1/32 point higher, according to the financial information service Telerate Inc.

The movement of a point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.

The Shearson Lehman Hutton daily Treasury bond index, which measures price movements on outstanding Treasury issues with maturities of a year or longer, was down 2.34 at 1,125.44

Corporate issues also lost ground. Moody’s investment grade corporate bond index, which measures price movements on 80 corporate bonds with maturities of five years or longer, was down 0.13 at 293.59.

Yields on three-month Treasury bills were up at 8.63% as the discount rose to 8.35%. Yields on six-month bills also rose to 8.93 as the discount increased to 8.44%. Yields on one-year bills advanced to 9.2% as the discount increased to 8.52%.

A basis point is one-hundredth of a percentage point. The yield is the annualized return on an investment in a Treasury bill. The discount is the percentage that bills are selling below the face value, which is paid at maturity.

The federal funds rate, the interest on overnight loans between banks, was quoted at 9% around midday, down from 9 1/8% late Wednesday.