High-Tech Issues Lag as Stocks Hit New Highs
The stock market pressed ahead to new highs in active trading Wednesday, but some high-technology issues did not join in the advance.
The Dow Jones average of 30 industrials rose 5.26 to 1,320.56, surpassing the record of 1,315.41 set last Friday.
Volume on the New York Stock Exchange reached 143.87 million shares--the heaviest total in more than two weeks--against 115.42 million on Tuesday.
Interest Rates Fall
Interest rates have fallen lately on signs of persistent sluggishness in the economy. But brokers say that stock traders apparently believe that rates will come down far enough and fast enough to revive business activity in the future, averting any severe recession.
Some brokers also say that rates have already fallen to levels where investors are unhappy with returns available in the money market and are starting to look to stocks instead.
Wang Laboratories class B shares, traded on the American Stock Exchange, tumbled 1 1/8 to 15 1/2. The company said it expects to post an operating loss for the fiscal fourth quarter ending June 30.
Among other Amex technology issues, Amdahl fell 1 to 12 3/4, Dataproducts fell 3/8 to 10 3/4 and TIE Communications dropped 3/8 to 5 3/8.
In the Big Board’s technology sector, Digital Equipment was down 5 5/8 at 99, Data General fell 2 1/2 to 34, Computervision fell 1 to close at 13 1/2, Hewlett-Packard dropped 1 3/8 to 32 3/4 and International Business Machines fell to 128 1/2.
General Motors, which emerged the winner in the bidding to acquire Hughes Aircraft, gained 5/8 to 72 1/8.
Among other actively traded blue chips, Minnesota Mining & Manufacturing rose 1 to 76 3/4, American Express rose 5/8 to 47 3/8 and Ford Motor climbed 3/8 to 44 7/8.
Diamond Shamrock Off
BankAmerica, which led the active list, fell to 19 5/8 on top of a 1 7/8-point loss Tuesday, when the company said it expects its second-quarter results to fall to “near the break-even point.”
Diamond Shamrock lost 1/2 to 16 3/8. A Wall Street Journal article said that there was growing talk that the company might reduce its dividend.
The daily tally on the Big Board showed more than three issues rising in price for every two that lost ground. The exchange’s composite index gained 0.18 to 110.24.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 172.40 million shares.
The Wilshire index of 5,000 equities closed at 1,958.775, up 3.511.
Standard & Poor’s index of 400 industrials slipped 0.02 to 210.03 and S&P;'s 500-stock composite index was up 0.12 at 190.16.
The NASDAQ composite index for the over-the-counter market added 0.78 to 291.77.
At the Amex, the market-value index closed at 229.77, down 0.81.
Large blocks of 10,000 or more shares traded on the NYSE totaled 3,016, compared to 2,237 on Tuesday.
Bond prices rose again, continuing an advance that began in mid-March as signs developed that the economy is slowing.
The advance has sent interest rates on short-term Treasury issues to their lowest levels in nearly five years.
A weak economy has fueled speculation that the Federal Reserve Board will take additional steps to ease its credit policy, allowing interest rates to fall further and helping bond prices.
The Fed cut its discount rate--its interest charge on loans to financial institutions--to 7.5% on May 17 from 8%.
In the secondary market for Treasury bonds, prices of short-term governments rose by between 1/8 point and point, intermediate maturities were up by between 1/8 point and 18/32 point and long-term issues were up as much as 21/32 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 were up 1/2 point and utilities were up 3/8 point in moderate trading. Among tax-exempt municipal bonds, general obligations rose 1/2 point and revenue bonds were up 3/8 point, Salomon Bros. said.
Yields on three-month Treasury bills were up 1 basis point to 6.953%. Six-month bills fell 7 basis points to 6.98% and one-year bills were down 6 basis points at 7.14%. A basis point is one-hundredth of a percentage point. Yields on 30-year Treasury bonds fell to 10.27% from 10.34% on Tuesday.
The federal funds rate--the interest on loans between banks--traded at 8.125%, up from 7.675% on Tuesday.