Dow Rises 21.31 to Set New Record as Stocks Surge in Final Hour

NEW YORK â€”  Blue-chip stocks made a last-hour sprint toward a record high close today as the market vigorously extended its early 1985 rally.

The Dow Jones average of 30 industrials finished up 21.31 at a record high close of 1,297.92. That eclipsed the previous record high close of 1,292.62 set Jan. 29.

Advancing issues outpaced declines by three to one on the New York Stock Exchange, whose composite index rose 1.51 to a record 106.08. The previous highest close for the NYSE index was 105.39 on Friday.

Big Board volume totaled 142.46 million shares, against 111.12 million in the previous session.

At the American Stock Exchange, the market-value index was up 2.02 to 231.22.

The market had drifted higher for most of the morning session following a sharp decline on Monday and some tiny gains on Tuesday.

But many analysts said the market’s performance earlier in the week was a temporary pause due to profit-taking. They said the fundamentals remained in place to send stocks higher.

In afternoon trading, stocks surged. Analysts noted that several blue-chip issues which had fallen in the past two sessions recovered.

Other analysts have said it is unlikely that companies will maintain the rapid pace of earnings gains they turned in last year, and they say that may cloud the future outlook for stock prices.

In economic news today, the government reported today that retail sales rose 0.7% in January following a revised 0.5% drop in December.

Bond prices were little changed in quiet, early trading as a key short-term interest rate rose.

The federal funds rate, the interest on overnight loans between banks, traded at 8.688% at midday, up from 8.313% late Monday.

The markets for federal funds and U.S. government securities were closed Tuesday in observance of Lincoln’s Birthday.

Meanwhile, Federal Reserve Board policy makers were continuing a private meeting in Washington to review their strategy for 1985. Most analysts said they expect no significant changes in Fed policy to emerge from the meeting.

In the secondary market for Treasury bonds, prices of short-term governments were down 1/32 point in the early going compared with levels late Monday. Intermediate maturities were unchanged from late Monday and long-term issues were mixed, ranging from a decline of 1/32 point to a gain of 3/32 point, according to the investment firm of Salomon Bros. Inc.

The movement of a point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.

In corporate trading, industrials and utilities were unchanged from Tuesday’s late levels.