STOCKS STAMPEDE TO HIGHER PLATEAUS.
Major market averages charged into record territory once again Monday, amid seemingly unwavering investor enthusiasm for U.S. equities. The Dow Jones Industrial Average rose 42.72 points, or 0.57 percent, to finish at 7,478.50, after piercing the 7,500 level for the first time ever.
Also closing at record highs, the technology-laden Nasdaq composite rose 7.20 to 1,412.04, the S&P 500 gained 4.92 to 862.93, the New York Stock Exchange climbed 2.04 to 450.17, and the Russell 2000 rose 0.78 to 387.90.
Stocks traded mostly higher throughout the day, extending Friday's broad-based rally, and the market managed to shrug off weaker bond prices, which was undermined by a heavy dose of profit-taking.
Although stock prices appear to be a bit stretched with the Dow and S&P 500 into uncharted territory, many analysts say that the market is not trading at too high a premium and there is further room for growth.
``As far as the broader averages are concerned, it's not unreasonable to be (trading) at these levels,'' said Joseph Battipaglia, chief investment strategist at Gruntal & Co. He added that based on expected earnings for this year, a price-to-earnings multiple of 18 for the S&P 500 is not that far from his view of fair value.
``With rates coming down lower, inflation staying quiet, why wouldn't the market trade at these levels?'' he asked. He added that he believes the Federal Reserve will leave interest rates unchanged at its early July policy meeting.
Brokerage firms, drugs and personal-computer makers led the market's advance, while on the downside, airliners, money center banks and energy firms were among the weakest-performing groups.
``The tone of the market still remains positive, and the path of least resistance continues to be the upside,'' said Bill Meehan, market analyst at Prudential Securities.
The Dow's highest closes
1. 7,478.58, June 9, 1997
2. 7,435.78, June 6, 1997
3. 7,383.41, May 27, 1997
4. 7,357.23, May 28, 1997
5. 7,345.91, May 23, 1997
6. 7,333.55, May 15, 1997
7. 7,331.04, May 30, 1997
8. 7,330.18, May 29, 1997
9. 7,312.15, June 3, 1997
10. 7,305.29, June 5, 1997
Chart: (Color) The Dow's highest closes
Photo: (Color) No caption (Stockbrokers trading)