Early Market Advance Fizzles; Dow Drops 7
Stock prices fell broadly Tuesday as the market abruptly reversed course at mid-afternoon and ended a two-session rally.
Some utility and airline issues posted modest gains, but a number of blue-chips declined.
The Dow Jones average of 30 industrials, which rose 5.97 on Monday and more than 12 points over the past two sessions, fell 7.07 to 1,265.68. The widely known market indicator had been up 3.53 at noon.
Declining issues outpaced gainers eight to seven among those listed on the New York Stock Exchange. The NYSE composite index fell 0.37 to 104.53.
Big Board volume accelerated to 101.66 million shares from 89.90 million shares in Monday’s session.
The market has moved in a narrow range in recent sessions amid uncertainty about the outlook for the economy and corporate profits.
People Are Cautious
“People are being very cautious,” said Newton Zinder, who follows the stock market for the investment firm of E. F. Hutton.
Zinder noted that, even as the market moved higher early in the session, there was “not a great deal of conviction” to sustain the upward move.
He said uncertainty about the first-quarter profit outlook is driving some investors to “defensive stocks” such as utility issues.
Leading the list of actively traded issues on the NYSE was Kansas Gas & Electric, which rose 3/8 to 19 3/8.
TWA was the second most actively traded issues on the Big Board, rising 1/2 to 13. It extended for two days an offer to exchange common stock for some of its subordinated debentures.
Also in the airline group, AMR Corp. rose to 42 1/2 and Eastern Airlines was up 3/8 at 7 1/8.
American Telephone & Telegraph fell 1/8 to 21 3/8, but several other utility issues moved higher. Ameritech rose 1 1/8 to 83 5/8, Bell Atlantic was up 5/8 at 84 and Southwestern Bell was up 5/8 at 75 7/8.
Hospital Corp. of America, which announced merger plans over the weekend, fell 1 to 42 7/8.
Crown Zellerbach, which has indicated that it will resist a takeover bid from British financier Sir James Goldsmith, fell 3/8 to 41 3/8.
IBM fell 3/8 to 127 3/4.
In the credit markets, bond prices edged lower and interest rates were mixed in light trading.
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