NEW YORK -- U.S. stocks rose yesterday as gains in oil and electrical-equipment issues offset concern that earnings growth could slow if the Federal Reserve raises interest rates again.
The advance helped the Dow Jones industrial average to reach its highest point in more than a year, and the Standard & Poor's 500 index to rise to a record intra-day high of 482.86.
Still, investors were wary of placing big bets on stocks before the release of economic reports this week that will influence the Fed's next decision on rates. Only 255.13 million shares changed hands on the New York Stock Exchange -- the lowest since 250.56 on Dec. 29.
"There's going to be a tug of war between people worried the Fed rate increases have slowed the economy and those that think the economy is still growing," said Don Hays, director of investment strategy at Wheat First Butcher Singer.
A slowing economy would dim prospects for future corporate profit gains.
The Dow Jones industrial average rose 15.14, to 3,954.21, its highest close since 3,967.66 on Feb. 3 last year. Gains in International Paper Co., AlliedSignal Inc. and United Technologies Corp. offset losses in Coca-Cola Co., Boeing Co. and AT&T; Corp.
Shares of General Electric Co. gained 50 cents, to $52.625. The company's jet engine business is turning around and the sale of its Kidder, Peabody & Co. securities unit last year has removed a cloud over the stock, analysts said.
"They've proven they can grow through all economic cycles," said Kent Newcomb, an analyst at A. G. Edwards & Sons.
Besides GE, Honeywell Inc. helped electrical equipment shares rise; its stock gained 50 cents, to $36.375. The company's aerospace unit could generate sales of more than $5 billion annually by the end of the decade, Barron's reported, citing an analyst at NatWest Securities, Nick Heymann.
Among broad market indexes, the S&P; 500 closed up 0.19, at 481.65, below its record close of 482 set on Feb. 2 last year. During trading, the index eclipsed its all-time high of 482.85, registered on Jan. 31 last year. The Nasdaq composite index fell 1.01, to 789.42 -- its first drop in 10 days. Shares of Amgen Inc., Cisco Systems Inc., Tele-Communications Inc. and U S Healthcare Inc. fell the most.
Declining stocks matched advancers on the New York Stock Exchange. The Russell 2000 index of small capitalization stocks rose 0.11, to 255.53; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq stock exchanges, fell 2.86, to 4,753.94; and the Amex market value index slid 0.25, to 447.6.
Oil issues rose amid optimism that the economy's strength will spur demand for oil and gas to run factories, trucks and ships. Also, recent cold weather in the Northeast has lessened the probability that homeowners can put off filling their heating oil tanks until next year.
Exxon Corp. rose 62.5 cents, $62.50; Chevron Corp. added 75 cents, to $46.375; Mobil Corp. gained 25 cents, to $86.50; and Amoco Corp. rose 50 cents, to $58.625.
Shares of General Motors Corp. rose 37.5 cents, to $40.25, as some investors bet that the long-predicted slowdown in the economy isn't lurking around the corner, traders said. Also, GM's investment rating was raised to a "buy" from "hold" by Jack Kirnan, an analyst at Salomon Bros. Inc.
The Dow Jones transportation average rose 14.9, to 1,557.03, after Friday's 38.89-point gain. Airline issues were mixed after rallying Friday on Delta Airlines Inc.'s announcement that it will cap travel agent commission payments at $50 for all domestic flights. The cost savings is seen as a crucial step in the industry's return to profitability, analysts said.
Shares of Delta were unchanged, at $56.75, after rising $4 on Friday; UAL Corp., the parent of United Airlines, strengthened 50 cents, to $97.50, after soaring $5.25 on Friday; and AMR Corp., the holding company for American Airlines, slipped 25 cents, to $60, after spurting $3 the previous trading session.
Southwest Airlines Co. expects first-half results to suffer amid operations difficulties with new routes and intensifying competition, the Wall Street Journal reported. The stock lost $1.125, to $17.25.