Stocks Post 3rd Straight Loss of 1985
Stock prices slumped again Friday, recording their third straight loss since the beginning of the new year.
Some computer and other technology issues sustained notable losses in a session of quiet trading.
The Dow Jones average of 30 industrials, down 21.75 points in the first two sessions of the year, dropped another 4.86 to 1,184.96.
Volume on the New York Stock Exchange came to 77.48 million shares, down from 88.88 million Thursday.
Analysts said there was a general mood of disappointment among traders over the market’s sluggish start on 1985. Once the pressure of year-end tax selling was lifted, many market watchers had been hoping for a rally.
The news Thursday of a 4.3% rise in factory orders during November provided an upbeat signal for production activity in the early stages of 1985, but it stirred little enthusiasm for stocks.
Honeywell fell 1 7/8 to 56 3/8. In the course of issuing a forecast of higher revenue and earnings for 1985 on Thursday, the company said it saw “cautionary signals in the economy.”
Digital Equipment dropped 3 1/2 to 105. Digital said rumors that it was laying off some workers were untrue.
Gold-Mining Issues Weak
Elsewhere, Diamond Shamrock rose 3 to 21 and Occidental Petroleum dropped 1 3/4 to 25 after both issues were delayed in opening for several hours. The two companies said they were engaged in merger talks.
Scovill climbed 2 3/4 to 42. An investor group said it raised its offer for the company’s stock from $35 to $42.50 a share.
Gold-mining issues were weak as the price of gold closed below $300 on the Commodity Exchange in New York for the first time in more than 2 1/2 years. ASA Ltd. was down 3/4 at 46, Homestake Mining fell at 20 5/8 and Campbell Red Lake Mines dropped 5/8 at 16 3/8.
Most bond prices fell in quiet trading but finished the session above the day’s lows.
Yields on 30-year Treasury bonds, which climbed as high as 11.68% at midday, closed at 11.63%. But that was still above the 11.61% of late Thursday.
Meanwhile, a key short-term interest rate fell sharply. The federal funds rate, the interest on overnight loans between banks, slid to 7.25% from 8.3125% at midday and 8.5% late Thursday.
The Federal Reserve Board’s report of a $6.7-billion rise in the nation’s basic money supply in late December had little impact on late trading.
In the secondary market for Treasury bonds, prices of short term governments were unchanged to down 1/32 point, intermediate maturities nudged down 1/32 point, and long-term issues were off 6/32 point, according to the investment firm of Salomon Bros. Inc.
