Market Inches Broadly Lower; Dow Dips 0.12
stock market declined slightly Wednesday, adding to the broad losses of the previous session amid continuing uncertainty over the interest-rate outlook.
Earnings disappointments accounted for some of the most notable losers in a moderately active session.
The Dow Jones average of 30 industrials, down 21.73 on Tuesday, slipped another 0.12 to 1,325.04.
Volume on the New York Stock Exchange reached 100.04 million shares, compared to 103.98 million on Tuesday.
Analysts said traders were watching warily as the Treasury continued its record sale of $21.75 billion in bonds and notes.
Brokers say the reception accorded the refunding is expected to provide evidence of the direction of interest rates.
Wall Streeters also voiced some concern over the psychological impact of Tuesday’s decline in stock prices, which broke through what many technical analysts had described as significant “support” levels for the market.
Cullinet Software fell 6 to 18 5/8. Late Tuesday, the company said it expects to report lower earnings for the quarter that ended July 31, halting a streak of 29 quarters of increased profits.
Stop & Shop fell 4 to 39. Just after the close, the diversified retailer said its earnings for the fiscal quarter ending Aug. 17 will be “very disappointing” because of sluggish sales at its Bradlees division.
Rollins Tumbles
Rollins Environmental Services tumbled 10 3/4 to 24 7/8, posting the biggest percentage drop among NYSE issues, after officials in Louisiana ordered a waste-treatment plant operated by the company to be permanently shut down.
MGM/UA Entertainment was actively traded, up at 24. A definitive agreement was announced for Turner Broadcasting to acquire the company for $29 a share in cash.
Analysts said the stock’s sluggish response to Turner Broadcasting’s offer evidently stemmed from uncertainty about its ability to get financing for the deal.
Also on the plus side, General Bancshares jumped 11 to 56 on word of an agreement for Boatmen’s Bancshares to acquire the company in an exchange of stock.
Other bank stocks finished with mixed and fractional price changes.
In the daily tally on the Big Board, about three issues declined in price for every two that gained ground.
Large blocks of 10,000 or more shares traded on the NYSE totaled 1,970, compared to 1,893 on Tuesday.
Bond prices posted some modest gains as the federal government completed the second phase of its three-stage auction of $21.75 billion in new notes and bonds.
Short-Term Bonds Up
The Treasury plans to complete the auctions today with the sale of $6.5 billion in 30-year bonds.
In the secondary market for Treasury bonds, prices of short-term governments rose 3/32 point, intermediate maturities rose 5/32 point and long-term issues were up 6/32 point, according to the investment firm of Salomon Bros. The movement of a full 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 up 0.22 at 105.16. The Shearson Lehman daily Treasury bond index, which makes a similar measurement, rose 2.26 to 1,104.88.
In corporate trading, industrials were up 3/8 point and utilities rose 1/2 point in moderate trading, Salomon Bros. said.
Among tax-exempt municipal bonds, general obligations were unchanged and revenue bonds rose 1/8 point in light activity, the firm said.
Yields on three-month Treasury bills, meanwhile, fell 7 basis points to 7.18%. Six-month bills were off 3 basis points at 7.43% and one-year bills fell 3 basis points to 7.57%.
Yields on 30-year Treasury bonds were 10.71%, down from from 10.72% on Tuesday.
The federal funds rate, the interest on overnight loans between banks, traded at 7.625%, unchanged from Tuesday.
