Business: Action in the Market

Shaking off warnings from the Federal Reserve—and many a market analyst—investors continued to buy stocks and dump bonds last week in a speculative drive that sent Dow-Jones industrials up 2.15 points to 508.28, within four points of the year's high. While confidence in the nation's overall economic health is a factor in the rise, soaring stock prices have outdistanced foreseeable earnings. A bigger factor is the fear of inflation, which has grown so strong that many investors break previously accepted rules in their race to cover themselves against a possible decline in the value of the dollar.

Wall Street's investors have virtually...

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