Blue Chips Surge to Record High as Yields Edge Lower

Stocks staged another broad advance Wednesday, led by blue chips that had stagnated in recent sessions.

Elsewhere, bond yields eased, the dollar climbed again versus European currencies and prices for precious metals slumped.

On Wall Street, the Dow Jones industrials shot up 71.77 points, or 0.9%, to a record 8,259.31, surpassing the previous peak of 8,254.89 set a week ago.

In the broad market, winners topped losers by 18 to 10 on the New York Stock Exchange and by 25 to 19 on Nasdaq.

With market breadth so strong, “I think today probably surprised even the bulls and helped batter the bears,” said Alfred Goldman, technical analyst at A.G. Edwards & Sons.

Other indexes hitting records included the Nasdaq composite, up 8.91 points to 1,630.44, and the Russell 2,000 index of smaller stocks, up 2.41 points to 420.73.

Traders said blue-chip issues benefited from signs of stability in the bond market. Long-term yields had been moving up since Friday, in the wake of unexpectedly strong economic reports.

But yields edged lower on Wednesday. The 30-year Treasury bond yield slipped to 6.48% from 6.49% on Tuesday, even though demand at the government’s auction of new 10-year notes was slightly below expectations. The notes sold at an average yield of 6.205%.

The Treasury will auction new 30-year bonds today.

Bonds were helped Wednesday by the Federal Reserve Board’s so-called beige book report, a periodic survey of U.S. economic conditions. The latest report suggests there is no significant upward pressure on prices in the economy.

“There was a lot of anxiety . . . that it would show some pricing pressure,” said Marco Frustaci, a bond trader at Daiwa Securities America Inc.

With bonds stabilizing, investors flocked back to many blue-chip shares that have led the bull market’s powerful surge this year.

“There’s a lot of euphoria in the market, with low interest rates, the recent capital gains tax cut and strong earnings,” said Steve Enos, a money manager at Wells Capital Management in San Francisco.

President Clinton, at a Rose Garden news conference, said the market is “going up in an unprecedented rate, to unprecedented heights.”

Although he declined to comment on whether ordinary citizens understand the risk in the high-flying stock market, he said the rise in stock prices has been supported by “very brisk growth in our economy and strong growth in productivity.”

Among Wednesday’s highlights:

* Blue chips rising sharply included AT&T;, up $1.06 to $39.06; Exxon, up $1.31 to $64.88; GE, up $1.56 to $69.31; and Philip Morris, up $1.25 to $45.56.

* Apple Computer soared $6.56 to $26.31 after Microsoft announced it will take a stake in the troubled company. Microsoft added 13 cents to close at $143.44.

Other tech issues closed mixed, after surging in recent sessions. IBM gained $1.38 to $107.88, Oracle rose $1.19 to $58 and Sun Microsystems jumped $2.06 to $48.38. Texas Instruments was off $3 to $126 and Cisco Systems lost $1.56 to $80.38.

Also, Newbridge Networks slid $4.06 to $46.50 on worries about slower near-term earnings growth.

* Financial issues rebounded, led by Citicorp, up $5.25 to a record $139.88; BankBoston, up $2.94 to $87.38; and American Express, up $1.56 to $84.38.

* Energy stocks also were higher. Sun gained $2.69 to $38.44, ENI jumped $1.94 to $58.56 and Texaco was up $1 to $115.50.

In foreign trading, the Mexican market continued to power ahead, with the Bolsa index up 0.6% to a record 5,212.89.

But in Thailand, stocks slid for a second day after the government shut down almost half its non-bank lenders, triggering a run on deposits. The key stock index drooped 13.15 points, or 2%, to 635.32.

Indonesian stocks also tumbled, with the key index there losing 2% to 699.86 points.

In commodity trading, platinum and palladium plunged after a union official said a strike at Impala Platinum Holdings Ltd.’s refinery in South Africa may end today.

Near-term platinum futures in New York dove $18.60 to $431.00 an ounce.

Those declines also dragged down gold and silver.