Stocks Edge Down in Slow Trading; Dow Drops 2.57
The stock market declined slightly Friday in the slowest trading in more than three weeks as traders assessed the outlook for the federal budget deficit.
The Dow Jones average of 30 industrials slipped 2.57 to 1,353.05, finishing the week with a net loss of 4.03 points.
Volume on the New York Stock Exchange came to 87.86 million shares, down from 121.48 million Thursday and the lightest total since an 83.67-million-share day July 8.
On Thursday, Congress approved a budget proposal intended to shrink the projected federal deficit by $55.5 billion in the government fiscal year that begins Oct. 1. Stock prices rose in Thursday’s session as traders anticipated the agreement, which broke a long deadlock between the House and Senate.
However, analysts said there were many questions in investors’ minds about how far the measure would go toward resolving the deficit problem.
In Friday’s economic news, the Labor Department reported that the civilian unemployment rate held steady at 7.3% in July. It also said that non-farm payrolls, a figure closely watched on Wall Street, posted a larger than expected increase.
In the bond markets, prices fell by as much as $10 for every $1,000 in face value Friday after the employment report was released.
Airlines Turn Mixed
ITT, which reported higher second-quarter earnings Thursday, rose 5/8 to 33 1/2 in active trading.
Texas Instruments, subject of some negative comments by analysts quoted in the Wall Street Journal, dropped 1 5/8 to 103.
In the airline sector, which had advanced strongly earlier in the week, prices turned mixed. Eastern gained 5/8 to 11 1/2 and UAL added 3/8 to 58, while AMR was unchanged at 50 and Delta was down at 50 3/8.
Middle South Utilities was the volume leader among NYSE issues, down 1/2 at 11 1/8.
MGM-UA Entertainment climbed 1 to 17 7/8. The company said it was talking with various parties, including broadcasting executive Ted Turner, about a possible sale of its assets other than its United Artists business.
BankAmerica rose 1 1/8 to 16 7/8, rebounding from recent selling that followed the company’s report of a $338-million loss for the second quarter.
In the daily tally on the Big Board, about five issues declined in price for every four that gained. The exchange’s composite index dropped 0.33 to 110.85.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 105.64 million shares.
The Wilshire index of 5,000 equities closed at 1,981.504, down 3.981.
Large blocks of 10,000 or more shares traded on the NYSE totaled 1,748, compared to 2,487 on Thursday.
Standard & Poor’s index of 400 industrials fell 0.54 to 213.18, and S&P;’s 500-stock composite index was down 0.63 at 191.48.
The NASDAQ composite index for the over-the-counter market rose 0.52 to 304.53.
At the American Stock Exchange, the market-value index closed at 235.04, up 0.59.
Auction Due Next Week
The bond markets were also looking ahead to next week’s auctions of $21.75 billion in new notes and bonds. It will be the largest quarterly refunding ever.
In the secondary market for Treasury bonds, prices of short-term governments fell 6/32 point, intermediate maturities fell by between 3/8 point and 7/8 point and long-term issues were down 1 1/8 points, 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, fell 0.41 to 104.88 from Thursday’s late levels.
The Shearson Lehman daily Treasury bond index, which makes a similar measurement, fell 4.46 to 1,100.71.
In corporate trading, industrials and utilities each fell a full point in light trading, Salomon Bros. said.
Among tax-exempt municipal bonds, general obligations fell 3/4 point and revenue bonds were down 1/2 point in light activity.
