NEW YORK — NEW YORK -- U.S. stocks soared yesterday, driving the PTC Standard & Poor's 500 Index over 500 for the first time, amid optimism about stable interest rates and robust corporate profits. Technology issues led the advance.
Stocks rallied after a government report showed factory orders for big-ticket goods, such as televisions and washing machines, fell in February for the first time since October.
"The ideal scenario, which is what the market seems to have in sight, is a recovery that slows, but not too much," said Charles Crane, director of research at Spears Benzak Salomon & Farrell. "That would provide enough economic tail wind to keep the sails of corporate profits full.
"In addition, it would keep the risk of overheating inflation to a minimum," he said. "Combine reasonable profit growth with low inflation, and you have the recipe for expanding valuations and a sustained rally."
The Dow Jones industrial average climbed 50.84, to 4,138.67 -- the seventh time in the past 11 sessions it set a record and the first time it closed above 4,100. United Technologies Corp., Aluminum Co. of America, Caterpillar Inc. and Du Pont Co. posted the largest gains. It was the biggest gain in two weeks.
During the week, the Dow gained 65.02, bringing the advance since Nov. 23 to 12.6 percent.
The S&P; 500-stock index increased 5.02, to 500.97, the first time it ever passed the 500-point mark. Rising prices for telephone, auto, financial, semiconductor, computer and oil stocks boosted the index.
Almost eight common stocks rose for every three that fell on the New York Stock Exchange, where volume reached 369.5 million shares, higher than this year's average of 331.6 million.
The Nasdaq composite index, heavily weighted with technology stocks, jumped 7.27, to 818.66, surpassing Thursday's record. Adobe Systems Inc., Intel Corp., Microsoft Corp., Cisco Systems Inc. and Tele-Communications Inc. all gained.
The Wilshire 5000 rose 46.22, to a record 4,911.27, and the Russell 2000 index of small stocks gained 1.32, to 258.85, beneath its March 18, 1994, peak of 271.08.
Signs that orders for transportation equipment remain strong, even though durable good orders dropped overall, helped aerospace companies. Boeing, which yesterday said it would offer early retirement to 13,000 workers and possibly lay off 5,000 more, rose 62.5 cents, to $49.75. Last week, it won a $1.2-billion order from Scandinavian Airline System. United Technologies, which makes jet engines for many of Boeing's planes, rose $1.125, to $67.50.
Copper and aluminum stocks gained, some to their highest levels since last October, as optimism rose that higher prices for the metals will translate into increased profits. Alcoa rose 87.5 cents, to $40.875. Smith Barney Inc. raised the aluminum producer to "buy" from "neutral."
Phelps Dodge Corp. rose $1.875, to $56.75; Reynolds Metals Co. added 87.5 cents, to $48.25; Alumax Inc. gained 87.5 cents, to $25.875; and Magma Copper Co. climbed 87.5 cents, to $17.75.
The Commerce Department's durable goods report dispelled concern economic growth will feed inflation and ultimately prompt the Federal Reserve to increase rates, traders and analysts said. Durable goods orders last month fell 0.8 percent, matching economists' forecasts.
"This is another piece of the puzzle showing that the economy is really slowing," said James Solloway, director of research at Argus Research. "And it provides the Fed with an excuse to ignore the dollar's weakness and keep interest rates steady."
There's probably enough confidence among investors to carry the Dow industrials to 4,200, said Spears Benzak's Mr. Crane. Among the firm's largest holdings are Compaq Computer Corp., Comcast Corp., American International Group, Unocal Corp. and Nynex Corp.
Meanwhile, technology stocks extended Thursday's rally amid confidence their earnings will remain strong even as the economy slows, analysts said.
After the market closed Thursday, Adobe said its first-quarter earnings surged 80 percent on higher software sales and licensing revenue.