Stocks closed sharply higher in very heavy trading Friday, boosted by a late burst of buy programs as the market continued its weeklong recovery amid program activity tied to the year's final "triple-witching hour."
The Dow Jones industrial average, which climbed 19.18 points Thursday, soared 41.72 points to 3,807.19 - its highest level since Nov. 18.The New York Stock Exchange composite index rose 1.58 to 250.54, while Standard & Poor's 500-stock index climbed 3.45 to 458.79. The average price of a share gained 19 cents.
Advances topped declines 1,343-933 among the 2,916 issues crossing the NYSE tape.
Adjusted volume ballooned to 478,701,000 shares from 332,780,000 in the same period Thursday.
It marked the third-highest tally in Big Board history, topped only by the 604.3 million shares that changed hands on Oct. 19, 1987 - the Black Monday market crash - and the next day's record-high 608.1 million shares.
But Friday's session did set a record after the opening bell. The NYSE said volume soared to 183,270,000 in the first half-hour of trading, eclipsing the previous record of 182,410,000 set March 18.
Volume was inflated by program activity related to the "triple-witching hour" - the quarterly expirations of stock-index futures and options and options on individual stocks on the same day, which often causes volatility in the stock market and exaggerates volume.
Prices ended marginally higher on the American Stock Exchange and narrowly mixed on the Nasdaq Stock Market.
Treasury securities and the U.S. dollar remained mixed.
The bellwether 30-year Treasury bond, which eased 3/32 Thursday to yield 7.87 percent, edged up 2/32 to 95 30/32. The issue's yield, which moves in the opposite direction of its price, was 7.85 percent.
The dollar changed hands at 1.5725 German marks and 100.24 Japanese yen, compared with 1.5708 marks and 100.38 yen late Thursday.
In overseas trading, the Tokyo stock market closed narrowly mixed with the key Nikkei index edging higher for the third consecutive day on the back of arbitrage and institutional buying.
London rebounded and Frankfurt gained more ground following the expirations of futures and options contracts, but Paris retreated on a lack of conviction.
On Wall Street, Alan Ackerman, executive vice president at Reich & Co., said the market had "a busy and dizzy day" because of program activity related to the triple expirations and "positioning by some portfolio managers for the new year."
Ackerman said he felt encouraged that the Dow industrial average managed to close above 3,800 "despite all the doomsdayers and naysayers," referring Wall Street's bears.
"Essentially, the market of late has been energized by the fact that the economy is strong and inflation remains unoppressive. As long as the Fed sits still or leaves rates unchanged during December, the market has a good chance of getting a good year-end rally," he added.
Although there is a growing sentiment that the Federal Reserve will not raise short-term interest rates at its Tuesday's policy meeting, a minority of market observers still think the pre-Christmas deliberations will produce the year's seventh tightening move.
Don R. Hays, director of investment strategy at Wheat First Butcher & Singer in Richmond, Va., called the market's moderately higher opening as a follow-through to the rebound that began last Friday.
Hays said the fact that bonds did not sell off following a strong housing starts report "was added encouragement for the market."
Shortly before the market opened, the Commerce Department reported that home construction surged 6.9 percent in November, the largest increase in eight months, to a seasonally adjusted annual rate of 1,540, 000 units, following a 4.6 percent drop in October.
Economists had expected an annual rate of 1,447,000 units in November.
Commerce also said building permits, a sign of future activity, fell 1 percent to 1,384,000 units after declining 1.9 percent in October.
On the NYSE trading floor, Wal-Mart Stores paced the Big Board actives, edging up 1/8 to 223/4.
General Electric followed, gaining 11/8 to 501/8 after raising its quarterly dividend to 41 cents a share from 36 cents and authorizing the repurchase of up to $5 billion of common stock over the next two years.
Hanson Plc was third, edging up 1/8 to 177/8.
The Amex Market Value Index edged up 0.21 to 426.23, while the average price of an Amex share was unchanged. Advances led declines 309-278 among the 841 issues traded. Volume rose to 24,849,000 shares from 17,927,000 traded Thursday.
U.S. Bioscience led the Amex actives, adding 5/16 to 21/2.
Elsewhere, Pegasus Gold lost 3/4 to 105/8 following Thursday's announcement it will not pay a year-end dividend because the company is "embarking on a critical phase of developing a new generation of mines. "
The Nasdaq composite index fell 1.61 to 729.07. Declines edged advances 1,325-1,138 among the 3,652 issues traded.
Intel paced the Nasdaq actives, rising 7/8 to 591/2.