Dow Surpasses the 6,800 Mark; Bond Prices Slip

Blue-chip stocks leaped to their fourth record close for the week Friday as a slew of strong earnings reports lifted the Dow Jones industrial average above 6,800 points for the first time.

The Nasdaq composite, Standard & Poor’s 500 and New York Stock Exchange indexes also finished at new highs. Bond prices slipped.

The Dow ended up 67.73 points at 6,833.10, beating Thursday’s record of 6,765.37. Just 12 trading sessions into the new year, the index is up nearly 385 points, or a sizzling 6%.

Analysts said stable interest rates and sheer momentum also propelled the markets.

“A lot of the key economic numbers are behind us, which leaves earnings in control of the market,” said Marshall Acuff, a portfolio strategist at Smith Barney. “And earnings have been so far, so good.”

With the earnings reporting season just a few days old, the profit reports have proven favorable and, in the meantime, the bond market has found stable footing, leaving little in the way of a stock market that continues to draw on a seasonal cash infusion and seems intent on climbing.

Bond prices slid again Friday morning, lifting interest rates, after the Federal Reserve Board reported that industrial production rose 0.8% in December.

That was slightly higher than many analysts had expected. It also was the latest in a stream of unexpectedly strong economic readings that have raised concerns over whether the inflationary pressures, such as rising production costs, will remain in check.

As bond prices fell, the yield on the 30-year Treasury rose as high as 6.85% from late Thursday’s 6.82%. But the Treasury market recovered most of the early drop, taking pressure off stocks, with the yield finishing almost unchanged at about 6.83%.

Some of the session’s jitters were calmed in part by other reports showing that consumer sentiment worsened slightly in the first half of January and that the U.S. trade deficit grew less than expected in December.

“Even though industrial production was stronger than consensus estimates, there were some offsetting statistics that neutralized that number,” said Russ Labrasca, senior vice president at Principal Financial Securities of Dallas. “We continue to see very finely balanced moderate growth, modest inflation and still relatively low interest rates.”

Winners edged losers on the NYSE in heavy trading.

The Standard & Poor’s 500-stock list rose 6.42 points to 776.17, and the NYSE’s composite index rose 3.19 points to 409.31. It was the second straight record finish for both measures.

The Nasdaq composite index rose 8.47 points to 1,349.05, and the Russell 2,000 list of smaller companies rose 0.96 point to 367.88, with both topping Tuesday’s record highs.

Among Friday’s highlights:

* Blue-chip stocks continued to dominate the advance, evidenced by the Dow’s outperforming the other indexes.

DuPont rose 2 7/8 to 111 5/8 as the Dow’s strongest issue after an upgrade by Goldman Sachs. The Dow’s other big gainers included General Electric, up 2 1/8 to 103 5/8; J.P. Morgan, up 1 3/4 to 102 1/2; and McDonald’s, up 1 7/8 to 46 1/2.

* PaineWebber Group jumped 3 5/8 to 31 3/8 on a report that the company was being considered as a takeover target by BankAmerica and others. But after the close, PaineWebber issued a statement that said its chief executive had not engaged in any talks with BankAmerica. BankAmerica gained 1 to 106 7/8.

* Economically sensitive stocks performed well. Alcoa rose 1 3/8 to 73, Caterpillar added 1 to 78 3/4 and International Paper climbed 1/2 to 43 1/8.

* Only a handful of companies reported their quarterly results, but among the session’s standouts were several who did so late Thursday.

Ascend Communications led a furious rally among networking equipment companies, surging 6 1/8 to 75. The company was upgraded by several Wall Street brokerage houses one day after posting sharply higher fourth-quarter earnings.