Stocks & Bonds: Dow And S.&P. 500 Set Record Highs

Wall Street ended a record-setting week yesterday by surging again, sending the Standard & Poors 500-stock index past a trading high set in March 2000 and thrusting the Dow Jones industrial average past 13,900 for the first time.

Both the S.& P. and the Dow logged record closes for the second straight day. The blue-chip index gained 295.57 points for the week. But the technology-laden Nasdaq composite index lagged in yesterdays session as it has in the broader recovery from the dot-com collapse at the start of the decade.

In a week in which the Dow swung more than 450 points and rose 283 points in Thursdays session alone, investors grappled with unease over soured subprime loans and the broader economy before casting off such concerns and bidding stocks higher amid signs the consumer might yet again pull through and give Wall Street reason to climb.

Investors still seemed upbeat yesterday about earnings and takeover activity and appeared only slightly disappointed by the Commerce Departments report that retail sales fell 0.9 percent last month, after a revised 1.5 percent jump in May. The June figure was weaker than expected, with the decline being the steepest in nearly two years.

I think investors are overstating their moves on a day-to-day basis but over the long term, we continue to trend upward, said Brian Levitt, corporate economist at OppenheimerFunds Inc. I think that is reasonable given the strong global quality picture and the strong global growth picture.

The Dow rose 45.52 points, or 0.33 percent, to 13,907.25 yesterday.

Relief that Alcoa will not pursue a deal with Alcan helped the Dow yesterday, as did solid quarterly results from General Electric, which sent its stock above the $40 mark and to a five-year high.

Broader stock indicators also advanced. The Standard & Poors 500-stock index rose 4.80 points, or 0.31 percent, to 1,552.50. The Nasdaq composite index gained 5.27 points, or 0.20 percent, to 2,707.00 after spending much of the session moderately lower. Though the Nasdaq was trading at levels not seen since early 2001, the index remains well short of its closing record of 5,048.62, set in March 2000 when it was bloated by the late 1990s tech boom.

An upbeat report yesterday on the mood of consumers released after trading began seemed to inject the market with additional confidence. The Reuters/University of Michigan index of consumer sentiment increased to 92.4 for mid-July from 85.3 in June.

Treasury bond prices rose, with the benchmark 10-year note up 8/32, at 95 14/32, and the yield, which moves in the opposite direction from the price, falling to 5.09 percent from 5.13 percent late Thursday.

The dollar was mixed against other major currencies and still trading at a record low versus the euro and 26-year low against the British pound. Gold prices fell.

Light crude oil rose $1.43, to $73.93 a barrel, on the New York Mercantile Exchange.

A Standard & Poors analyst said that after Rio Tintos bid for the aluminum producer Alcan beat out Alcoas offer, Alcoa became a more attractive takeover target.

Alcan slipped 95 cents to $97.50, while Alcoa jumped $2.06, or 4.6 percent, to $47.35, making it the best performer among the 30 stocks that make up the Dow industrials.

At other companies, Energizer Holdings said it had agreed to acquire Playtex Products for about $1.16 billion. Playtex surged $2.45, or 16 percent, to $17.97, while Energizer rose to a record $114.17 amid enthusiasm over the deal. The stock finished up 94 cents, at $107.67.

The news yesterday appeared to trump longer-term concerns some investors might hold.

G.E. posted a rise in its second-quarter profits that met Wall Street forecasts and said it was ridding itself of its subprime mortgage business. The company also said it was increasing its stock-buyback program. G.E. rose 50 cents, to $39.50.

Amgen rose 98 cents, to $56.93, after the biotechnology company increased its stock-repurchase program by $5 billion, adding to the $1.5 billion already earmarked for buybacks.

RadioShack fell $2.12, or 6.5 percent, to $31.75, after an analyst questioned its sales growth potential.

Idenix Pharmaceuticals fell $2.22, or 38 percent, to $3.57 after drug regulators suspended a clinical study of the companys hepatitis C drug because results so far had not outweighed potential risks.

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