NEW YORK -- U.S. stocks closed slightly higher yesterday amid renewed optimism about the economy, sparked by a Conference Board report that consumer confidence rose in December to the highest level in almost three years.
"It's about time consumers realized the economy is improving," said Robert Dederick, chief economist at Northern Trust Co.
The Dow Jones industrial average closed up 0.84, at an all-time high of 3,793.77. The average rallied 35.21 points Monday to set the prior record.
The Standard & Poor's 500 Index rose 0.40, to a record 470.94, and the Dow Jones transportation average rallied 5.14, to an all-time high of 1,775.61, exceeding the previous high, set Dec. 13.
Both the Nasdaq Composite Index and the American Stock Exchange Market Value Index rose to finish about 2.9 percent below their record closing highs.
The Nasdaq Composite advanced 3.50, to 764.56, led by a gain in Intel Corp., which was added to the "recommended for purchase" list at Goldman, Sachs & Co. Its record close of 787.42 was set Oct. 15.
The Amex index climbed 2.84, to 470; its all-time record of 484.28 was set Nov. 2.
"The U.S. economy is the strongest in the world right now," said Timothy Connors, who helps oversee almost $3 billion for CoreStates Investment Advisers in Philadelphia. "The strength is translating into higher stock prices."
Yesterday's report from the Conference Board showed that the group's consumer confidence index rose to 80.2 from a revised 71.9 in November. This month's reading was the highest since March 1991.
About 10 common stocks rose for every seven issues that fell on the New York Stock Exchange. Automobile, semiconductor, retail and electric utility stocks recorded the biggest gains.
Automobile shares received a boost from S. G. Warburg & Co. analyst David Healy, who said Chrysler Corp. was his "favorite stock" for 1994.
"The company will introduce far more new models" than its U.S.-based rivals, General Motors Corp. and Ford Motor Co., Mr. Healy said.
Chrysler rose 62.5 cents, to $53.875, while GM gained 50 cents, to $56.75, and Ford rose 25 cents, to $64.75.
Stocks typically rise between Christmas and the New Year's holiday, and the stock market is benefiting from that seasonal pattern this week, analysts said.
"Historically, it's a good week," said Phillip Krauss, assistant manager for equity trading at Kemper Financial Services in Chicago. In the last 41 years, stocks rose 32 times in the final week of the year, he said. The average gain is 1.7 percent.
Trading was relatively active yesterday. About 203 million shares were traded on the Big Board, above the daily average of 176.8 million shares during last year's Christmas-to-New-Year's week.
Gerant Cos., Intel, Oracle Systems Corp., Merck & Co. and RJR Nabisco Holdings Corp. were the five most actively traded issues on the U.S. Composite.
Intel rose $1.25, to $64. "Simply put, Intel's stock is inexpensive, trading at about nine times next year's earnings estimate of $6.50 a share," said Rajiv Chaudhri, an analyst at Goldman Sachs who added the stock to the "recommended" list.
The advance in Intel's stock spilled into other semiconductor issues.
Advanced Micro Devices Inc. climbed 25 cents, to $17.75; Motorola Inc. gained 37.5 cents, to $91.75; Micron Technology Inc. increased 25 cents, to $46.375; and Texas Instruments Inc. rose 50 cents, to $63.125.
Oracle Systems shares fell for a fourth straight day amid concern about the company's earnings outlook. The stock slumped 87.5 cents, to $29.
Tiffany & Co. plunged $4.25, to $31.875, after the jewelry and luxury goods retailer reported lower-than-expected holiday season sales in Asia and Europe. Analysts at Goldman Sachs and Merrill Lynch & Co. lowered their investment ratings on the company.
New York Times Co. Class A shares climbed 87.5 cents, to $27.25. The newspaper publisher was raised to an investment "buy" rating from "outperform" at Smith Barney Shearson Inc.
Mutual funds composed of blue-chip stocks in Chile and Thailand rallied. Chile Fund Inc. advanced $1.625, to $46.375, amid expectations inflation would remain low and after recommendations from analysts to purchase Chilean companies' American depositary receipts. Thai Capital Fund gained $1.125,
to $22.875, after the Bangkok Set Index rose almost 3 percent in value overnight.