Stocks crest a new plateau
New York — Move over, Mt. St. Helens! The volatile stock market erupted on Jan. 12, driving the Dow Jones industrial average above its highest level ever, Monitor correspondent Ron Scherer reports. Just after 2:30 p.m. Wednesday, the widely watched average burst above 1,100 and later peaked at 1100.07. The highest previous closing of the stock average was 1,092.35, reached just Monday.
Although there was no specific news to drive prices higher, analysts said investors were cheered to see most banks lower their prime interest rate another notch from 111/2 to 11 percent. There was also widespread speculation that the Federal Reserve Board would lower the discount rate, the interest rate it charges member banks, from 81/2 to 8 percent at the end of the week.
As interest rates dropped, some analysts also said they saw signs the economy was starting to bounce back, which would propel corporate profits. Monte Gordon, director of research at the Dreyfus Corporation, noted: ''The market continues to drink at the fountain of hope that the recovery will take on substance and that the administration and the Congress will come up with viable programs concerning the ominous clouds of the budget deficit.''