An explosive buying spree in the final hour on Wall Street yesterday sent the Dow Jones Industrial Average to a record high of 1,292.62.
It was the best performance since Nov. 29, 1983, when the DJIA closed at 1,287.20. Several other market averages also reached new highs.
The Dow, the market's most closely followed indicator, was up 14.79 points for the day, and it was the 17th straight trading day in which more stocks advanced than declined. Gainers yesterday outnumbered losers 982 to 570.
The rally came late in the afternoon; it was thought to be sparked by institutional buying. Market analysts generally agreed that the upward sweep was an extension of the bullish sentiment that has been at work on Wall Street throughout January.
During the past three weeks, the market has advanced broadly, and the Dow Jones Industrial Average has gained more than 100 points.
David Jones, a senior vice president at Aubrey-Lanston, said the market surge was in tune with favorable economic news. "We have an almost perfect circumstance," he said, "for sustained growth and low inflation with stable rates."
The bond market responded as well, he said. Jones noted that a 30-year Treasury bond, the 11 3/4 of 2014, had traded yesterday as high as 105.5, up almost a full point, to yield 11.09 percent, down from 11.17 percent Monday.
The Dow Jones Transportation Average rose by 7.20, also closing at a record 614.37. One analyst noted that new highs in the transportation average are taken by some traders as a sign that a market rally will continue.
Hildegarde Zagorski, market strategist at Prudential-Bache, estimated that 30 million shares had changed hands in the last hour of the 115-million share day. The rally, she said, involved institutional buying, traders covering short positions and retail purchases.
"It's a carry forward of what's been going on all month," she said.
Charles S. Comer, head of market analysis for Oppenheimer & Co. Inc., likened the rally to "spontaneous combustion," but wondered, "What do we do for an encore?" He added, "Recent strength suggests the market will go still higher . . . but I honestly don't know what to expect."
The market started the day in a sluggish mood, and was down 4 points in early trading. It remained down through midday, went back up up to a half-point loss at 1:30 p.m. and moved down again. The upsurge began about 3:30 p.m.
Tony Woodruff, a market analyst with Kidder Peabody and Co., told Reuter that activity on the trading floors "just absolutely exploded in the final hour."
The session's volume leader was American Telephone & Telegraph, down 1/4 at 21 1/8. The company reported on Monday that earnings for its first year of operation after the breakup of the Bell System came to $1.25 a share.
Atlantic Richfield was the second most actively traded stock. It was down 1/4 at 43 1/2.