Investors Push Doubts Aside, Blue Chips Past 7,300

Investors wrestled with conflicting signals on inflation, but chose a positive spin near Thursday’s close, boosting the Dow Jones industrial average and other stock measures to more new highs. Bonds also rose.

The Dow jumped 47.39 points to 7,333.55--its first close above 7,300 and its 19th record this year--as it eclipsed the old mark of 7,292.75 set Monday.

The Standard & Poor’s 500 list and the New York Stock Exchange composite index also set records in the late advance.

Technology shares were among the day’s best performers. Intel rebounded sharply from Tuesday’s slide to lead the Nasdaq market, and Hewlett-Packard rallied in advance of its earnings report to help the Dow.

Blue-chip stocks had been stuck in a narrow range most of the session as some investors elected to wait ahead of the Federal Reserve Board’s meeting on interest rates Tuesday. The Fed raised short-term rates in March, the first increase in more than two years, in a bid to ward off inflation.

Conflicting economic news has sent mixed signals as to whether the Fed would raise interest rates next week.

“We see a 50-50 chance that the Fed may raise rates just to continue with their preemptive strike, but the inflation numbers have looked pretty good this week,” said Elaine Garzarelli, who remains bullish with a year-end target of 7,600 for the Dow.

Financial markets fell initially after the government said the core rate of inflation, excluding volatile food and energy prices, rose 0.3% as measured by the consumer price index. The gain exceeded Wall Street forecasts.

Bond prices rebounded after two subsequent reports supported arguments that manufacturing activity is slowing.

In one report, the Fed reported that U.S. industry was operating at 83.4% of its capacity in April, down from 83.7% in March.

Before bonds recovered, the yield on the 30-year Treasury bond rose as high as 6.95%. By late afternoon, the long-bond yield had fallen to 6.86% from Thursday’s 6.88%.

Advancing issues outnumbered decliners by a 10-9 margin on the NYSE, where volume was modest at 457.18 million shares.

The S&P; 500 rose 5.84 points to 841.88, the NYSE composite index rose 2.05 points to 437.65, and the technology-heavy Nasdaq composite index rose 18.03 points to 1,353.58.

Among Thursday’s highlights:

* Before reporting quarterly results that fell short of expectations, Hewlett-Packard rose 2 1/4 to 58 7/8. Other big gainers were Procter & Gamble, up 3 1/4 to 133 5/8, and Caterpillar, up 2 1/2 to 98 3/8.

* In the technology sector, personal computer maker Gateway 2000 jumped 7 1/2 to 68 7/8, after announcing a stock split, and Dell Computer rose 4 1/4 to 96 1/4.

Database systems maker Informix gained 2 3/16 to 11 3/8, amid optimism it would be taken over by Microsoft.

Intuit climbed 3 3/16 to 27 1/8 on acquisition speculation.

* Retailers were mixed after reporting quarterly results. Gap rose 5/8 to 32 3/4 after a positive report, but Kmart fell 3/8 to 14 1/8 after the second-largest U.S. retailer reported unsurprising results.

* Banks gave up some of the week’s gains. BankAmerica fell 1 to 119 7/8; Chase Manhattan fell 1 1/4 to 97 1/8.

* Oil issues declined as the slowing economy and ample supplies pointed to a decline in petroleum prices. Exxon lost 1 to 58 7/8 and Texaco fell 7/8 to 110 1/8.

The dollar plunged to 114.70 yen, its lowest level since Dec. 27, in Europe on expectations that Japan will raise interest rates. In late New York trading, the dollar settled at 116.10 Japanese yen, down from 117.20 on Wednesday.

But the dollar rose to 1.6980 German marks from 1.6947 amid concern that the German government may revalue some of its gold to help shrink the country’s yawning budget deficit.

Coffee prices soared to 20-year highs on frantic buying by speculators and roasters worried about small stockpiles and the current crop.

Overseas, Tokyo’s Nikkei stock average fell 0.8%, Frankfurt’s DAX index fell 0.3% and London’s FTSE-100 fell 0.1%.