NEW YORK, FEB. 6 -- Stocks soared 43 points today, pushing the Dow Jones industrial average through the key 2800 barrier for the first time since Iraq seized Kuwait six months ago and leading traders to speculate about a new bull market.
"You've got a herd instinct at work here," said chief trader Dan Murphy at C.J. Lawrence about the most recent rally action, which followed Friday's Federal Reserve discount-rate cut. "People aren't willing to fight the tape any longer."
"Stocks keep going higher and we've got the underpinnings of a real bull market," said Brett Discher, vice president of equity trading at Dain Bosworth.
"There is so much strength in the market you have to believe that it's not a rally within a bear market, it's the start of a new bull market," said James Tarantino, head of over-the-counter trading at Hambrecht & Quist in San Francisco.
The Dow jumped 42.57 points to close at 2830.94, leaving the market up more than 100 points in just three days and bringing the average's three-week gain since the outbreak of war in the Persian Gulf to 322 points, or 12.8 percent.
Gaining issues pounded losers by a ratio of about 3 to 1 in strong New York Stock Exchange trading volume of 276.9 million shares. It was the sixth consecutive day with a volume of more than 200 million shares.
A successful U.S. Treasury auction of $11 billion in 10-year notes, modest moves in crude oil prices and a decline in gold helped bolster the market, but traders and analysts agreed that the driving force was the market's own momentum.
Analysts said that investors, after undergoing a six-month pullback, are now looking beyond the war and the recession, anticipating an economic upturn in the next six months.
The trading was accented by buying by small investors. Many investors are moving money into stocks as lower interest rates reduce returns from other investments such as money-market accounts, said Robert O'Toole of Lehman Brothers Inc.
"Investors aren't waiting for an end to the recession or an end to the war. The market, after all, is a leading indicator," said Gene Jay Seagle, a vice president at Gruntal & Co. brokerage.
Falling interest rates also played a role in what one trader today called a "buying panic." The Federal Reserve last week cut its benchmark discount lending rate by a half-point to 6 percent -- the second move in six weeks -- and banks followed by cutting their prime lending rate to 9 percent.
Thom Brown, a managing director of Rutherford Brown & Catherwood, said overseas investors have started buying U.S. stocks aggressively, "now that the events don't appear to be an aberration." A falling dollar has also made U.S. stocks a relatively better buy for foreign investors.
But Lehman Brothers's O'Toole warned to expect some easing by week's end. "I think it would be healthy if we had a correction. You can't keep going straight up or you end up coming straight down," he said.
The U.S. 30-year Treasury bond gained only a quarter point as stocks closed. Credit markets are not yet through the Treasury's record quarterly refunding of $34.5 billion, the last leg of which is scheduled for Thursday, when $11 billion in bellwether 30-year bonds will be auctioned.
Among broad stock indexes, gains were more impressive than those of the Dow for much of the session. At the close, the Standard & Poor's 500 was up 6.81 at 358.07, the NYSE index rose 3.49 to 195.38, the American Stock Exchange index added 6.33 to 332.73 and the Nasdaq index gained 7.04 to 439.24.
On the NYSE, oil stocks soared after C.J. Lawrence said oil shares were cheap relative to the market. Atlantic Richfield rose 2 3/4 to 126 1/4, Unocal added 2 3/8 to 27 1/8, Amerada Hess rose 3 1/2 to 48, Exxon gained 2 1/4 to 52 7/8 and Texaco was up 2 3/8 to 60 3/4.
Eastman Kodak lost 2 1/4 to 44 after the company reported fourth-quarter earnings that were slightly below Wall Street estimates.
Software company Microsoft climbed 4 1/2 to 105 3/4, an all-time high, after the company made strong presentations at a Goldman Sachs technology conference, analysts said.
Delta Air Lines rose 2 1/2 to 72 1/8 and UAL gained 2 5/8 to 136 1/2. Both won bidding for some Eastern Air Lines assets in a bankruptcy court auction.
RJR Nabisco continued to attract buyers and has led the most-active list for the past three sessions. It closed up 1/4 at 7 1/8.
John Hanson Bancorp said it knew no reason for the increased volume and rise in its stock It closed at 13/16, up 7/16 on 230,000 shares. The average daily volume is 12,485.