Stocks Mixed as Dow Falls 3 to End Streak
The stock market settled for a mixed showing Tuesday after some late selling concentrated in the blue chips.
The Dow Jones average of 30 industrials, which had reached record closing highs in each of the last three sessions, dropped back 3.13 to 1,334.01.
Bank stocks were strong on anticipation of favorable second-quarter earnings reports in the industry.
Volume on the New York Stock Exchange stepped up to 111.07 million shares from 96.08 million Monday.
Factory Orders Gain
As the market opened, the Commerce Department reported that new factory orders increased 2.1% in May for their strongest showing in more than six months. Orders declined in both March and April.
At the same time, the Census Bureau reported that the sale of new single-family homes rose 9.7% in May for their biggest increase in eight months.
Analysts said the figures gave new support to the belief that economic activity was reviving again after a sluggish period early this year.
However, brokers also said some traders found the temptation strong to take profits after the market’s recent rise.
The renewed strength in the economy has raised some questions on Wall Street over whether interest rates can continue their recent decline. Rates were mixed in the credit markets Tuesday.
In the banking group, Citicorp climbed 1 1/8 to 50 1/8, Chase Manhattan 1 1/8 to 61 3/4, J. P. Morgan 1 to 52 3/4, Banc One to 34 7/8 and Manufacturers Hanover 5/8 to 39 1/2. The second-quarter results of many banks are expected to have benefited from falling interest rates in the money markets.
Exxon was actively traded, down 3/4 at 51 7/8. A special federal appeals court ruled Monday that the company must pay the government almost $2 billion for selling oil from a Texas field at prices that exceeded federal regulations in the years 1975 through 1980.
Exxon called the ruling “inequitable and unfair” and said it was considering a further appeal.
Sperry, rumored to be the subject of a takeover offer from Ford Motor, rose 1 to 53 3/4. Ford shares dropped 1/2 to 45 1/2.
Healthamerica tumbled 4 5/8 to 19 3/8, posting the day’s biggest percentage decline among NYSE issues. The company, which operates health maintenance organizations, said it expects to report that second-quarter earnings were “about flat.”
Kaufman & Broad rose 1 to 17 3/8. It posted second-quarter profits of 50 cents a share, up from operating profits of 24 cents a share in the comparable period last year.
In the bond market, prices were narrowly mixed as a key short-term interest rate bounced up and down.
The federal funds rate, the interest on overnight loans between banks, climbed to 8.125% at midday, then retreated to 7.875% by the end of Tuesday’s session.
