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DOW JONES AVERAGE HITS A NEW HIGH AS MARKET REACTS TO PLEASANT SURPRISE

The Dow Jones industrial average leaped to a new record close Friday as more better-than-expected corporate earnings reports and a firmer dollar triggered a rally in volatile trading due to "double-witching hour" expirations.

The Dow Jones industrial average, which gained 23.17 points to a record 4230.66 Thursday, gained another 39.43 points to 4,270.09 - a new all-time high.The New York Stock Exchange composite index also rose 1.67 to 274.76, while Standard & Poor's 500-stock index added 3.20 to 508.49. The average price of a NYSE share jumped 21 cents.

Advances outpaced declines 1,328-856 among the 2,947 issues crossing the tape.

Final floor volume amounted to 406,240,000 shares, down from 365,720, 000 Thursday.

Prices also closed a fraction higher on the American Stock Exchange and modestly higher the Nasdaq Stock Market.

Treasury securities finished little changed, while the U.S. dollar weakened.

The bellwether 30-year Treasury bond, which gained 9/32 Thursday to yield 7.34 percent, inched up 1/32 to 103 14/32. The issue's yield, which moves in the opposite direction of its price, was 7.33 percent.

Late in New York, the dollar changed hands at 1.3680 German marks and 82.65 Japanese yen, compared with 1.3837 marks and 83.11 yen late Thursday.

The Commodity Research Bureau index of 21 widely watched commodities, often used by investors as an inflation barometer, added 0.22 to 237.02.

In Europe, Frankfurt closed higher due to expirations of stock options, according to traders. London also rose sharply, bolstered by non-inflationary economic news and a steadying dollar. Paris also finished ahead.

On Wall Street, Alan Ackerman, executive vice president at Reich & Co., said the market "was on a roll.

"The stage was set early in the session after the dollar rallied on the European markets, and then a steady stream of strong earnings fed the rally," Ackerman said. "I saw waves of optimism surfacing."

Ackerman particularly highlighted IBM Corp.'s rapid climb. Big Blue tacked on another 23/4 to 913/4 after reporting stronger-than-expected first-quarter earnings Thursday.

Ackerman said IBM's gains helped move other Big Board technology issues higher as well.

Among them, Compaq Computer placed second on the NYSE's most actives' list, rising 11/8 to 367/8. Compaq reported slightly better-than-expected earnings Thursday.

Ackerman said the market faced volatility due to options expirations.

Program trading related to "double-witching hour" - the monthly expirations of stock-index futures and options on the same day - sometimes causes volatility on the stock market.

On the NYSE trading floor, Citicorp paced the actives, adding 7/8 to 471/2.

General Instrument came in third, losing 1/2 to 34.

Among other sharp gainers, Kellogg Co. gained 23/8 to 633/4 after reporting that better overseas cereal sales helped first-quarter earnings rise to 89 cents a share from 81 cents a year.