Dow Falls 15 in Sharpest Drop in 5 Months
The stock market took its biggest drop in more than five months Monday in selling attributed to concern over the interest-rate outlook.
Several energy issues bucked the down trend in a session of relatively light volume on Wall Street.
The Dow Jones average of 30 industrials fell 15.46 to 1,259.72 for its largest loss since it dropped 18.22 points last Nov. 16.
Volume on the New York Stock Exchange came to 88.86 million shares against 86.57 million Friday.
Analysts said uncertainty about interest-rate prospects put a damper on the market.
The Treasury is scheduled to announce today its plans for its quarterly sale of bonds and notes. The financing is expected to bring a heavy new supply of securities to the credit markets.
Prices of existing Treasury bonds, which move in the opposite direction from interest rates, showed losses of nearly $10 for every $1,000 in Monday’s activity.
In addition, there were widespread doubts on Wall Street that the Federal Reserve will take any aggressive action in the near future to encourage lower interest rates.
Could Increase Worries
The government reports today on its index of leading economic indicators for March. If, as some analysts project, the index shows a substantial gain, it could increase Wall Street’s worries about the outlook for interest rates.
Atlantic Richfield jumped 5 to 58 in active trading. The company reported plans to buy back $4 billion of its stock and raised its dividend.
Talk that other oil companies might take similar steps in the future spurred buying in a broad range of energy stocks. Standard Oil of Ohio rose 1 to 49 1/2, Amoco gained 7/8 to 64 3/4, Mobil added 1 to 31 3/8 and Texaco was up 5/8 at 40.
Auto stocks were lower, continuing their recent retreat amid concern that the peak of the current cycle might have passed for the industry. General Motors lost 1 3/4 to 66 3/4, Ford Motor 7/8 to 41 3/8 and Chrysler 7/8 to 34 3/4.
Mobile-home and recreational-vehicle issues also were weak. Fleetwood Enterprises dropped 1 7/8 to 20 1/8, Winnebago Industries 1 to 11 1/2 and Coachmen Industries 7/8 to 13 1/8.
Losers among the blue-chip industrials included Merck, down 1 3/4 at 102; Digital Equipment, down 3 1/8 at 99; International Business Machines, down 7/8 at 126, and General Electric, off 1 at 59 1/8.
Losers Top Gainers
In the daily tally on the Big Board, declines outnumbered advances by more than two to one. The exchange’s composite index fell 0.89 to 104.63.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 108.86 million shares.
Standard & Poor’s index of 400 industrials dropped 1.60 to 200.75 and S&P;’s 500-stock composite index was down 1.55 at 180.63.
The NASDAQ composite index for the over-the-counter market fell 2.03 to 282.11.
At the American Stock Exchange, the market-value index closed at 228.49, down 1.32.
Bond prices fell in quiet activity.
The federal funds rate, the interest on short-term loans between banks, rose to 8.50% from 7.875% on Friday.
Yields on 30-year Treasury bonds climbed to 11.52% from 11.42% on Friday.
T-Bill Yields Rise
By day’s end in the secondary market, yields on three-month Treasury bills rose 4 basis points from Friday’s late levels to 7.89%. Six-month bills rose 4 basis points to 8.13%, and one-year bills were up 5 basis points at 8.37%. A basis point is one-hundredth of a percentage point.
In the secondary market for Treasury bonds, prices of short-term governments were unchanged to down 2/32 point, intermediate maturities fell between 1/8 point and 3/8 point and long-term issues fell 1/2 point, according to the investment firm of Salomon Bros. The movement of a point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.
In corporate trading, industrials and utilities were off 1/2 point in light trading. Among tax-exempt municipal bonds, general obligations and revenue bonds also fell 1/2 point in light activity.
