FINANCIAL MARKETS : Stocks Set 3rd Record in Row as Dollar Gains

Stocks closed at a record high Monday for the third session in a row as the Dow Jones average soared through the 4,300 level for the first time, as strong corporate earnings brought buyers into the market.

The dollar also gained ground and Treasury bond yields retreated, pushing prices higher.

In reaching its third record in a row, the popular blue-chip stock gauge finished up 33.89 points, or 0.79%, at 4,303.98.

Broader indicators also climbed to new highs. The New York Stock Exchange composite index rose 2.08 points to 276.84, beating the previous mark of 275.00 set April 13. Standard & Poor’s 500-stock index rose 4.40 points to 512.89. The previous record of 509.23 was established on April 13 as well.

Advancing Big Board stocks outpaced decliners by about 8 to 5, while volume came to 326.42 million shares, up from 406.24 million on Friday.

The stock market spent much of the day languishing at mixed levels while investors bought selectively and sold to collect profits on other issues. But buying resumed with gusto as the final hour approached, energizing a lethargic session.

The rally occurred while Wall Street rejoiced over robust quarterly results from numerous companies.

Investors took their cue from the bond market, where traders bid up prices in the afternoon after overcoming concerns about a heavy supply of new Treasury notes and bonds coming to market soon.

The benchmark 30-year bond yield fell 0.03 percentage point to 7.30%. Its price rose 5/16 point, or $3.13 per $1,000 invested, compared to Friday. Prices and yields move in opposite directions.

Stability in the dollar also encouraged stock investors, who lately have managed to overlook the potential hazards of the dollar’s prolonged and deep slump.

In currency trading, the dollar moved higher against the Japanese yen and German mark amid renewed speculation that the Group of Seven industrial nations might make a concerted effort to boost the ailing U.S. currency.

In late New York, the dollar was quoted at 83.03 yen, up from 82.70 on Friday. The dollar also changed hands at 1.375 marks, up from 1.369.

Among Monday’s market highlights:

* Hospital operator Vencor said it was acquiring Hillhaven, a nursing home company, in a $1.9-billion deal. Hillhaven rose 3 7/8 to 28 3/8 and Vencor fell 4 3/8 to 32 5/8.

* U.S. Healthcare dropped 5/8 to 29 1/8. It reported higher first-quarter earnings but said its medical costs rose.

* Chrysler fell 5/8 to 44 1/2 after the auto maker’s directors rejected the $55-a-share buyout proposal by Tracinda, a company owned by billionaire Kirk Kerkorian.

* Stocks of computer chip and other technology companies continued to gain amid evidence of strong industrywide demand despite slower economic growth. Motorola rose 2 to 54 1/4. Intel rose 3 5/8 to 96 1/2. Texas Instruments was up 7 1/4 at 101. AT&T; was unchanged at 49 1/8.

* Investor confidence in Mexico improved as the peso strengthened slightly and several prominent corporations reported unexpectedly good quarterly financial results. Telefonos de Mexico was up 1 3/4 to 31 3/8, Grupo Televisa rose 1 3/4 to 20 3/4, Grupo Tribasa rose 1 to 7 3/4 and Mexico Fund rose 2 1/4 to 17 1/2.

* Exxon was up 3/8 to 69 5/8 in heavy NYSE volume of more than 1.6 million shares.

Overseas stocks closed mixed. In Tokyo, the Nikkei 225-share average shed 164.19 points to close at 16,804.05, while Frankfurt’s 30-share DAX average ended down 0.43 points at 1,976.21. In London, the FTSE-100 average gained 9.4 points to close at 3,209.3.

Mexico City’s Bolsa index surged 97.78 points, or 5.09%, to 2,017.20.