MARKET HITS NEW RECORD

CAPE GIRARDEAU -- As local investors and stockbrokers watched with anticipation, the Dow Jones Industrial average closed above the 3000 mark for the first time Wednesday. The market closed 17.58 points higher to end the day at 3004.45.

Despite lack of news for a long-awaited cut in interest rates, the market surpassed its previous high mark of 2999.75, set last July.

The mood was lively in local stockbrokers' offices late Wednesday. "It's exciting," said Bob Etherton, investment representative with Edward D. Jones & Co. "A lot of investors are optimistic. They can see the light at the end of the tunnel."

Marsha Limbaugh, branch manager of the local A.G. Edwards & Sons office, said some bargain-hunting activity has started with their clientele but most are scrutinizing the market closely for now. "There is more fence-sitting now than anything," she said. "People are wondering when to sell to realize a profit."

The new stock market record should also impact worldwide financial happenings, said Dr. Keith Russell, chairman of the department of accounting and finance at Southeast Missouri State University. "If you assume, and most do, that the stock market is a bellwether of economic forecasting, then yes, it will have a significant impact worldwide," he said.

Russell said if the market can hold above the 3000 mark for two or three days, it will stay at that level for some time.

He credited several factors for the thriving Dow: "When you look at the trends the market has seen, the resolution of the Middle East crisis and the significant reduction in the price of oil, there appears to be a lot of cash out there getting ready to come back to the market."

Etherton said more people have expressed interest in getting into the stock market and those already involved are wanting to enter more deeply. He indicated Edward D. Jones & Co. is conservatively recommending utility stocks as good investments.

Neither stockbroker would provide a prognosis of the immediate future of the stock market, saying that forecasting the general reaction is difficult. "There may be some short-term new highs in the next couple of days," Limbaugh predicted. "Then we expect some mini-corrections after that."

How high can the market go? Russell said that three to five years from now the market will be testing the 4000 mark. "Of course, that does not mean the trip will be straight north," he said.

Russell remembered with a laugh the "doom and gloom" of late 1976, when the market was 576 and people said it couldn't go much higher. Since then, the stock market has consistently demonstrated that it's a "very good place to be for long-term growth," said Russell.

He said that while the market hit the 2700 range in October of 1987, it fell back to the 1800 range in 1988. "The market is like a cross-cut saw - up and down," he said.

This new record close will probably attract many small to medium investors into the market, Russell said. "Had they been willing to buy at a time everyone said not to buy, they would have made more money. It's part of the market psychology. The average investor comes into the game late," he said.

Russell said the 3000 mark is an important psychological hurdle. "If it stays over the 3000 mark throughout the end of the week, then we can reach other big hurdles. I heard people say it would never get over 1000. Now, I feel we'll see 4000 one day," he said.

Both Limbaugh and Etherton said people benefiting from the market rally range from present investors to salary earners who may see an increase in wage levels resulting from higher corporate profits.

Both stock brokerages anticipate the Federal Reserve will lower the interest rate. "The rates do have to come down to stimulate the economy," Limbaugh stated. "It's a matter of when the Fed makes the decision. We expect it anytime now."

One thing that could push the market over the 4000 mark in a hurry would be for Congress to lower the capital gains tax, said the Southeast finance professor. Likewise, if legislators debate the tax and do nothing, Russell said it will dampen stock market enthusiasm.

Russell said the current stock market boom is exciting for the students as well. "We have one of only 21 programs in the U.S. where students buy and sell in the stock market every day with real dollars," he said.

Students in the Portfolio Theory class went to the New York Stock Exchange last fall to watch the stock market in action. The futures class plans a trip to Chicago this year to the Futures market as part of the department's overall finance thrust, said Russell.

The new record for the Dow came on heavy volume. On the New York Stock Exchange floor, 246.93 million shares traded hands, up from 214.48 million in the previous session.