Market Manages Small Gain; Dow Rises 0.55
The stock market emerged from a sluggish session clinging to a small gain Monday.
The Dow Jones average of 30 industrials, up 4.97 on Friday, rose another 0.55 to 1,247.79.
Volume on the New York Stock Exchange slowed to 85.65 million shares from 94.87 million on Friday.
One news item that caught the eye of many Wall Streeters was a statement by Preston Martin, vice chairman of the Federal Reserve, that the Fed plans to reduce stock margin requirements--the minimum down payment set for investors who buy stock using borrowed money.
Held to Limit
For more than a decade, the Fed has kept the margin limit at 50% of a stock’s purchase price.
A relaxation of the margin rules would logically stand to make stocks more attractive to investors willing to take significant risks in the hopes of realizing large profits.
Analysts’ enthusiasm was restrained a bit, however, by the impending sale of $20.5 billion in bonds and notes by the Treasury this week. Investors will be closely watching the response that the offering gets for clues to the future direction of interest rates.
Atlantic Richfield was the volume leader, up at 62 1/2. Activity in the stock included blocks of 1.29 million and 730,000 shares at 62 7/8.
American Cyanamid fell 2 1/8 to 49 7/8. The company said some sell orders were apparently prompted by unfounded rumors that the Food and Drug Administration had called for further tests of an anti-cancer drug that Cyanamid hopes to put on the market soon.
Warner Communications, discussed as a possible subject of a bidding war for control of the company, rose 1 1/2 to 30 1/2.
Mobil Slips
Mobil slipped 1/2 to 32 5/8 after hitting a 52-week high in active trading. The company announced plans to restructure its Montgomery Ward subsidiary and set it up as an independent entity.
USF&G; was up 1/8 at 33. An offering of 4.8 million shares of the stock came to market at 32 7/8.
The daily count on the Big Board showed about seven issues advancing in price for every six that declined. The exchange’s composite index edged up 0.01 to 104.18.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 101.95 million shares.
Standard & Poor’s index of 400 industrials lost 0.12 to 199.63 and S&P;’s 500-stock composite index was down 0.09 at 179.99.
The NASDAQ composite index for the over-the-counter market slipped 0.46 to 279.85.
At the American Stock Exchange, the market-value index closed at 225.78, up 0.18.
The Wilshire index of 5,000 equities closed at 1,854.200, up 1.280.
Large Blocks Down
Large blocks of 10,000 or more shares traded on the NYSE totaled 1,596, compared to 1,923 on Friday.
Bond prices rose in moderate trading as the government began a heavy slate of borrowing.
Beginning today, the Treasury Department plans to auction $20.5 billion in notes and bonds over three days as it conducts its quarterly refunding.
In the secondary market for Treasury bonds, prices of short-term governments rose 1/8 point, intermediate maturities rose point and long-term issues were up 12/32 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 rose 1/8 point and utilities rose point in light-to-moderate trading. Among tax-exempt municipal bonds, general obligations rose point and revenue bonds were up 1/2 point, Salomon Bros. said.
Yields on three-month Treasury bills were down 1 basis point at 7.71%. Six-month bills rose 1 basis point to 7.91%, and one-year bills were off 1 basis point at 8.09%. A basis point is one-hundredth of a percentage point.
Yields on 30-year Treasury bonds slipped to 11.26% from 11.30% late Friday.
The federal funds rate, the interest on overnight loans between banks, traded at 8%, down from 8.125% late Friday.
