Dow Racks Up Record as Other Indices Remain Flat

The Dow Jones industrial average racked up its first record close for the New Year on Monday, building on the momentum that produced 44 record finishes in 1996.

Bond yields rose while the price of gold fell to its lowest level in more than three years.

The Dow rose 23.09 points to close at 6,567.18, surpassing the record of 6,560.91 set Dec. 27. The Nasdaq index also set a record, rising 5.72 points to 1,316.40.

Despite the records for the major stock indices, Wall Street’s overall performance was mixed, with broad indicators exhibiting little of the momentum showed by blue chips.

Even the 30-stock Dow index, which raced up nearly 75 points in early trading, was well off its peak level, pulled down by a series of computer-selling programs in late trading.

The strength in stocks was concentrated among economically sensitive companies, which benefited from a growing perception that the economy is still expanding at a solid pace.

“There’s no question that the recent numbers have continued to run on the strong side,” said Peter Canelo, chief investment strategist at Dean Witter.

“Housing, construction and consumer confidence have all been strong,” he said. “The first implication of all that is just better earnings.”

The earnings argument that propelled the Dow to a 101.60-point gain on Friday held sway for most of the session, fueling a rally.

However, even as stocks were rising, fear that economic growth could also bring higher inflation ate away at the bond market, where interest rates crept steadily higher all day.

Eventually, analysts said, that concern spread to the stock market.

As bond prices fell, the yield on the 30-year Treasury bond rose from late Friday’s 6.73% to 6.77%, the highest level since late October.

Compounding investors’ inflation worries was the cold snap crossing the nation, which sent energy prices soaring in commodities trading.

On the New York Stock Exchange, advancing issues outnumbered decliners by a 5-4 margin.

The Standard & Poor’s 500-stock list fell 0.36 point to 747.67, the NYSE composite index rose 0.22 point to 394.28 and the American Stock Exchange composite index fell 0.39 point to 572.06.

Meanwhile, on New York’s Commodity Exchange, the active February gold contract closed down $3.30 to $358.70 an ounce after tumbling $4.60 on Friday. The last time gold traded at current levels was in early October 1993, when it hovered at $350.00.

Among Monday’s highlights:

* IBM rose 2 1/8 to 161 1/4 as the Dow’s strongest issue, but was up as much as 4 1/4 earlier in the session. Intel, which jumped 8 points on Friday, gave back much of its gain, rising 1/2 to 138 7/8.

* AT&T;, down 1 7/8 to 39 5/8, was the Dow’s weakest issue after Salomon Bros. lowered its earnings estimates for the company.

* Oil stocks such as Texaco, up 1 3/8 to 102, Exxon, up 1 3/8 to 100, and Chevron, up 3/4 to 66 7/8, were boosted as cold weather drove domestic crude prices above $26 per barrel.

February crude oil soared 78 cents to end at $26.37 a barrel on the New York Mercantile Exchange, nearing its six-year high of $26.80 set in late December.

* Bank stocks were mostly lower, pressured by the weaker bond market and rising interest rates. Chase Manhattan fell 7/8 to 87 3/8, Citicorp dropped 3/4 to 103 3/4 and First Union eased 5/8 to 74.