Stocks Mixed; Dollar Hits 2-Year Highs

The Dow Jones industrial average eked out its fifth record of the year Monday, but the broad stock market was mixed as bonds braced for a new round of economic data.

Meanwhile, the dollar rose to two-year highs against most European currencies amid supportive comments from German and U.S. officials.

The Dow index added 5.39 points to a record 6,709.18, adding to Friday’s surge of 78.12 points.

Among broader indexes, the Standard & Poor’s 500 was up a minuscule 0.01 point to a record 759.51, while the Nasdaq composite index of mostly smaller stocks slipped 1.11 points to 1,330.91.

Winners had a modest edge over losers on the New York Stock Exchange and on Nasdaq, but trading volume declined from last week’s heavy pace.

The session was largely devoid of the volatility that has marked trading since the start of the year--a welcome respite for many market players, but one unlikely to last: Fourth-quarter corporate earnings reports will begin flowing out this week.

“Earnings announcements are going to be key,” said Mark Donovan, a principal at Boston Partners Asset Management, with $6.7 billion in assets. “There’s going to be a lot of action, good and bad.”

The bond market also was reasonably calm Monday, with the yield on the bellwether 30-year Treasury bond closing at 6.85%, unchanged from Friday.

Still, rates are up sharply from their levels of a few weeks ago, as many traders have viewed recent government data as suggestive of a stronger-than-expected economy. This week will bring more data, including a report today on December consumer inflation, and a report Friday on December industrial production.

If perceived U.S. economic strength is working against bonds, it is working for the dollar. The currency reached a 28-month high against the German mark Monday after U.S. Treasury Secretary Robert Rubin and German Bundesbank President Hans Tietmeyer separately made positive comments.

Rubin reiterated the Clinton administration’s policy that a strong dollar is in the nation’s interest, while Tietmeyer said the Group of 10 central bank governors aren’t concerned about current exchange rates--which was viewed as a hint that the dollar’s strength could continue.

In New York, the dollar rose to 1.5925 German marks, its highest level since August 1994, before dropping to 1.5883 later.

The dollar also climbed to 1.3796 Swiss francs, its highest level since May 1994, before ending at 1.3765.

Against the Japanese yen, meanwhile, the dollar reached 116.44, up from 116.06 on Friday.

A strong dollar can help U.S. financial markets by encouraging foreign investment here.

Among Monday’s highlights:

* J.P. Morgan helped boost the Dow after the banking giant reported stronger-than-expected fourth-quarter earnings. The stock jumped 2 3/4 to a record 102 1/2.

Other bank stocks also rallied, with Norwest up 1 3/8 to 45 1/4, First Union up 1 7/8 to 77 3/8 and BankAmerica up 1 1/4 to 99@.

* Intel jumped 2 3/8 to a record 146 7/8 amid speculation that it may report higher-than-expected earnings today. Meanwhile, rival chip maker Advanced Micro Devices gained 1 1/4 to 29 after the company released a new microprocessor on par with some of Intel’s Pentium lines of chips.

Among other tech issues, Western Digital rocketed 5 1/4 to 72 after the computer disk drive maker reported robust quarterly earnings.

* American Standard gained 3 to 43 1/4 after the maker of Trane air conditioners and plumbing fixtures rejected a $50-a-share offer from Tyco International, which rose 1/2 to 55 1/8 after the company said it wouldn’t pursue a hostile takeover.

* Oil prices sank after forecasts of warmer temperatures in the Northeast, the world’s largest heating oil market, triggered a sell-off in the fuel. Among energy stocks, Mobil dropped 2 1/2 to 127 5/8, Anadarko Petroleum fell 1 3/8 to 70 7/8 and Unocal lost 1 3/8 to 43 3/4.