Market Closes Mixed; Dow Index Slips 3.14
The stock market was mixed Monday as investors awaited the latest report on President Reagan’s health following abdominal surgery.
The Dow Jones average of 30 industrials, down more than 5 points in early trading and up more than 2 points late in the afternoon, closed with a 3.14 loss at 1,335.46. The average closed last week at a record high.
Volume on the New York Stock Exchange slowed to 103.92 million shares from 120.26 million last Friday.
Wall Streeters said there was a general mood of encouragement over reports that President Reagan was recovering quickly from abdominal surgery.
But they said some investors spent the day waiting cautiously for further reports on his case. Just as the market closed, Reagan’s doctor said that cancer was found in a growth that had been removed from the President’s intestinal tract but that there was no evidence that the malignancy had spread.
IBM Net Down, Stock Up
Meanwhile, brokers said traders responded with some relief to International Business Machines’ report that it earned $2.30 a share in the second quarter, against $2.65 in the comparable period a year ago.
IBM had given advance warning that its profits for the quarter would fall short of year-earlier levels. The numbers reported by the company were in the range of analysts’ expectations.
IBM shares rose 1 to 125 1/2 in active trading.
Jack Eckerd Corp. fell 3 1/8 to 26 3/8. The company said it bought 1.88 million shares of its stock held by Dart Group for $29.50 apiece and settled all litigation between the two parties.
When it originally acquired a 5% stake in Eckerd, Dart Group said it was considering an offer for control of the company.
American Hospital Supply climbed 3 7/8 to 46, and Baxter Travenol dropped 1 3/4 to 14. The two companies announced a merger plan calling for the exchange of cash and Baxter securities for American Hospital Supply’s stock.
Bank stocks fell as traders responded to expected favorable earnings reports by taking profits in the group. Chase Manhattan lost 1 5/8 to 60 5/8, Citicorp 7/8 to 49 5/8 and J. P. Morgan 1 1/2 to 51.
Auto issues were mixed as the domestic manufacturers posted a 14.9% decline in early-July car sales. General Motors fell 7/8 to 67 1/2, and Ford Motor lost 3/8 to 42 3/4, while Chrysler was up 1/8 at 34 3/8.
The daily tally on the Big Board showed about nine issues rising in price for every seven that declined. The exchange’s composite index slipped 0.20 to 111.93.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 126.59 million shares.
Large blocks of 10,000 or more shares traded on the NYSE totaled 2,082, compared to 2,459 last Friday.
The Wilshire index of 5,000 equities closed at 1,996.182, down 1.923 or 0.10% from the preceding trading day.
Standard & Poor’s index of 400 industrials dropped 0.57 to 192.72, and S&P;’s 500-stock composite index was down 0.70 at 211.78.
The NASDAQ composite index for the over-the-counter market rose 0.65 to 303.04. At the American Stock Exchange, the market value index closed at 233.72, up 0.53.
Bonds Little Changed
In the bond market, prices wound up little changed as traders awaited news on the President’s health and a scheduled series of economic reports.
Later this week, the government plans to report on housing starts, industrial production and consumer spending in June and offer another estimate of second-quarter growth in the gross national product.
On Monday, the Commerce Department said that business inventories fell 0.4% in May, the steepest decline in more than two years, but that sales rose 0.2%.
Some analysts say the Federal Reserve will eventually have to relax its monetary policy to stimulate the economy, while others say growth in the money supply and the decline in the dollar have dimmed chances for any further easing.
In secondary trading, yields on three-month Treasury bills fell 6 basis points to 7.05%. A basis point is one-hundredth of a percentage point. Six-month bills fell 7 basis points to 7.18%, and one-year bills were off 3 basis points at 7.33%.
In the secondary market for Treasury bonds, prices of short-term governments were unchanged, intermediate maturities rose 1/32 point and long-term issues fell as much as 5/32 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.
The Merrill Lynch daily Treasury index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, was off 0.09 to 106.54 from Friday’s close. But the Shearson Lehman daily Treasury bond index, which makes a similar measurement, rose 0.46 to 1,117.45.
