Stocks Close Mixed as Dow Recoups to Gain 2
Some late buying of blue-chip issues enabled the stock market to finish mixed Monday in the quietest trading in more than three weeks.
In the bond market, prices resumed their recent advance, bouncing back from two consecutive declines. Short-term interest rates were narrowly mixed.
The Dow Jones average of 30 industrials, down 10.86 points Friday and another 3 points in early trading Monday, recovered to post a 2.02 gain at 1,318.44.
Volume on the New York Stock Exchange hit 87.94 million shares, down from 99.63 million on Friday and the lightest total since an 85.97-million-share day May 24, just before the Memorial Day weekend.
Market Pulls Back
After hitting record highs last Wednesday and Thursday, the stock market pulled back as interest rates stopped falling.
Analysts say traders’ hopes for a further easing of credit by the Federal Reserve suffered a setback Friday when the Labor Department issued statistics showing unexpected strength in the job market.
Many stock traders are watching cautiously to see how the Fed fares in its effort to keep the economy growing without reviving inflationary pressures.
James Baker, secretary of the Treasury, said the Reagan Administration is looking for a pickup in economic growth in the second half of the year as business conditions show the effects of recent moves by the Fed to encourage lower interest rates.
UAL jumped 3 7/8 to 58 1/8 in active trading. The company said it planned to “recapture” for corporate use excess funds that have accumulated in the various pension plans of its United Airlines employees.
Trans World Airlines held steady at 19 1/2. There was talk on Wall Street that TWA might soon reach a merger agreement with Resorts International in order to thwart a hostile takeover bid by financier Carl C. Icahn.
Gulf & Western slipped 1/8 to 40 3/4 after taking a 2 1/2-point jump Friday. Over the weekend, an agreement was announced for the company to sell its consumer and industrial products group to Wickes Cos. for about $1 billion.
Some utility and financial issues that have risen sharply as interest rates declined in recent weeks ran into selling pressure from profit takers. Ameritech dropped 1 3/8 to 91 3/8, Bell South 1 to 40 5/8, Pacific Gas & Electric 1/8 to 19 7/8 and Great Western Financial 5/8 to 28.
In the daily tally on the Big Board, declining issues outnumbered advances by nearly three to two. The exchange’s composite index slipped 0.14 to 109.83.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 107.28 million shares.
The Wilshire index of 5,000 equities closed at 1,951.920, down 2.217.
Standard & Poor’s index of 400 industrials dipped 0.02 to 209.37, and S&P;'s 500-stock composite index was down 0.17 at 189.51.
The NASDAQ composite index for the over-the-counter market lost 0.33 to 290.70.
At the American Stock Exchange, the market-value index closed at 227.15, down 0.99.
Large blocks of 10,000 or more shares traded on the NYSE on Monday totaled 1,589, compared to 2,033 on Friday.
In the credit markets, the price of long-term bonds had fallen about 2 points, or $20 for each $1,000 in face value, following the release of a Labor Department report of sharp employment gains in May.
But while some analysts saw strength in the employment figures, others said that the economy continues to be weak and that the Federal Reserve may take steps to encourage lower interest rates.
In the secondary market for Treasury bonds, prices of short-term governments rose 1/8 point, intermediate maturities were up between 1/8 point and 3/4 point and long-term issues were up as much as 29/32 point, according to the investment firm of Salomon Bros.
In corporate trading, industrials rose 1/2 point and utilities rose 5/8 point. Among tax-exempt municipal bonds, general obligations fell point while revenue bonds were up 1/8 point.
Yields on three-month Treasury bills rose 3 basis points to 7.20% in secondary trading. Six-month bills were unchanged at 7.30%, and one-year bills were off 6 basis points at 7.43%. A basis point is one-hundredth of a percentage point.
Yields on 30-year Treasury bonds fell to 10.43% from 10.53% on Friday.
The federal funds rate, the interest on overnight loans between banks, traded at 7.5%, down from 7.563% on Friday.