Early Rally Bid Fails; Dow Ends Off 6.07 : IBM Leads Decline to 3-Week Low; Volume Off
The stock market slumped to a three-week low Monday, yielding to some afternoon selling after a weak early advance faded.
International Business Machines led the retreat amid worries over the company’s forthcoming first-quarter earnings report.
The Dow Jones average of 30 industrials, up about 3 points in early trading, was off 6.07 at 1,252.98 by the close. That marked a low point for the average since it finished at 1,249.67 on March 18.
Volume Declines
Volume on the New York Stock Exchange dropped off to 79.96 million shares from 86.91 million last Thursday, before the long Easter-Passover holiday weekend.
The market attracted some buyers in the waning minutes last Thursday when the White House announced an agreement with Senate Republicans on budget proposals aimed at reducing the federal deficit.
But brokers said many traders were guarded in their appraisal of that news. They said much remains to be done in Washington before investors generally are likely to become convinced that significant progress is being made on the deficit.
The market is also faced in the next few weeks with corporate earnings reports for the first quarter.
Analysts lately have been scaling down their estimates for a good many companies and warning that disappointing profit figures may be common, with economic growth having been a bit less robust than had been expected for the January-March period.
International Business Machines, the No. 1 holding of investing institutions, was a case in point Monday, falling 3 1/8 to 123 7/8. The company said last month that it would report lower profits for the first quarter but still expects solid growth for the year as a whole.
Allied Rises
Cox Communications jumped 14 to 76 1/2 for the day’s biggest percentage gain among NYSE issues. The family-owned Cox Enterprises said it would make a $75-a-share offer for all the Cox Communications stock in public hands.
Allied Corp., a component of the Dow Jones industrial average, rose 3 1/2 to 39 7/8. The company said it struck a deal to sell a half-interest in its oil and gas subsidiary, Union Texas Petroleum, to a group of investors.
Unocal led the active list and climbed 1 to 49 3/4 on volume of more than 2.6 million shares. A group led by T. Boone Pickens, chairman of Mesa Petroleum, said it began a tender offer for 64 million Unocal shares at $54 apiece.
Declining issues outnumbered those advancing by about five to four on the Big Board. The exchange’s composite index dropped 0.43 to 103.28.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 95.81 million shares.
Standard & Poor’s index of 400 industrials fell 1.21 to 198.42 and S&P;’s 500-stock composite index was down 1.00 at 178.03.
Indexes Mixed
The NASDAQ composite index for the over-the-counter market gained 0.99 to 276.45.
At the American Stock Exchange, the market-value index closed at 227.51, up 0.66.
The Wilshire index of 5,000 equities closed at 1,836.596, down 6.795.
Large blocks of 10,000 or more shares traded on the NYSE totaled 1,442, compared to 1,612 on Thursday.
In the credit markets, bond prices slid in light trading as markets reopened in the wake of the three-day Easter holiday.
The bond markets had been closed Friday in observance of Good Friday.
In secondary trading, yields on three-month Treasury bills were off 1 basis point at 8.13% from last Thursday’s close. Six-month bills fell 3 basis points to 8.58%, and one-year bills were off 2 basis points at 8.78%.
