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DOW SOARS BY 80 TO NEW RECORD AS RATES PLUNGE

Wall Street's celebration of the federal budget deal turned euphoric Wednesday, propelling stocks further into record territory as bond-market interest rates sank to their lowest level in nearly 1 1/2 years.

The Dow Jones industrial average rose 80.36 to 8,254.89, plowing past 8,200 just two weeks after its first close above 8,000.

Broader stock measures also rallied to new highs, with the Nasdaq composite index pushing back into record territory for the first time in two weeks.

The Dow, which has set closing highs in six of the past seven sessions, has now risen 28 percent this year, tripling the return that many experts had forecast for all of 1997.

The Commerce Department reported Wednesday morning that new home sales jumped an unexpected 6.1 percent to 819,000 in June. Strong homes sales can serve as a major economic catalyst, driving demand for a wide array of building materials and home furnishings.

Analysts said bond traders were able to discount the strong data amid the enthusiasm over the balanced budget deal announced in Washington on Tuesday. The deal would presumably help the bond market by keeping government borrowing, and the supply of Treasury bonds, under control.

As bond prices rose Wednesday, the yield on the 30-year Treasury -- a key determinant of consumer and corporate borrowing costs -- fell to 6.32 percent, its lowest finish since February 1996.

Financial services companies, whose lending businesses can flourish when interest rates fall, led the stock market's advance for the second straight day.

Citicorp nearly duplicated Tuesday's gain, rising 5 3/1 6 to 135 3/4 , Chase Manhattan jumped 3 5/8 to 112 1/2 , and J.P. Morgan rose 1 7/1 6 to 115 1 1/1 6 as one of the Dow's strongest components.

The Dow's other big gainers included IBM, up 3 1/8 to 106; Procter & Gamble, up 2 3/4 to 153 1/8 ; and Alcoa, up 1 7/8 to 87 1 5/1 6, after an upgrade by Lehman Brothers.

3Com Corp. lost 2 1/4 to 55 3/4 after the networking equipment company told investors and analysts that weak demand in Europe will crimp profits in the current quarter.

Clorox Co. gained 4 1 5/1 6 to 139 9/1 6 after reporting profits rose 13 percent on higher sales.

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