Market Drifts Broadly Lower; Dow Slips 6.50
Stocks drifted to a broad loss Monday in the quietest session since early July, pushing the Dow Jones industrial average to its lowest level in nearly seven weeks.
Steel, computer, chemical and airline issues paced the decline. Several oil stocks advanced, however.
The Dow Jones average of 30 industrials fell 6.50 to 1,314.29, its lowest level since June 20, when it closed at 1,299.73. The average tumbled 32.26 points last week for its worst weekly decline of 1985.
Union Carbide, a component of the average, skidded 1 7/8 to 48 7/8. A toxic chemical leaked Sunday from a Union Carbide plant in Institute, W. Va., forcing about 130 people to seek medical care.
Losers overall led gainers by nearly two to one on the New York Stock Exchange. The NYSE composite index fell 0.39 to 108.67.
Volume Slowed
Big Board volume slowed to 77.34 million shares from 81.75 million last Friday. It was the lowest turnover since 62.45 million shares changed hands July 5, which was a Friday following the Fourth of July holiday.
The market was off broadly early in the day, recovered some of its losses at mid-session, but then drifted down again in the final hour.
The lackluster showing marked the third anniversary of the start of the powerful bull market that during its run has propelled the Dow Jones industrial average and NYSE trading volume to record highs.
It was Aug. 12, 1982, when the average bottomed at 776.92 before soaring to 1,000 two months later.
Recently, however, the market has been pulling back amid increased investor uncertainty over the outlook for interest rates and the economy overall.
Wall Street is struggling to figure out whether the economy is rebounding from its meager growth in the first half of the year and what impact that will have on Federal Reserve monetary policy and the course of interest rates.
Further Clues Due
Traders could receive further clues this week when the government is scheduled to issue July data on industrial production, housing starts and retail sales. On Monday, the Labor Department said wholesale prices rose 0.3% last month following a 0.2% rise in June.
Amid the slow trading, much of the activity was focused on actual or rumored takeover situations.
United Energy Resources jumped 3 3/4 to 39 3/4 and topped the NYSE’s active list after agreeing to be acquired by Midcon for about $41 a share. Midcon lost 1 to 43.
Trans World Airlines fell 3/8 to 22 1/8, the price at which a 772,000-share block crossed. TWA is the target of rival acquisition bids from Texas Air and financier Carl C. Icahn. Texas Air was unchanged at 18 on the American Stock Exchange.
Pan American World Airways, which has been the subject of takeover speculation, rose 1/2 to a 52-week high of 8 5/8 in heavy trading.
CBS, which recently thwarted a buy-out attempt by broadcaster Ted Turner, climbed 3 1/2 to 109 after Loews Corp. sought regulatory approval to boost its stake in CBS to 15%. CBS said it “accepts on good faith” Loews’ statement that the stock purchases “are for investment” but otherwise declined comment. Loews was up 5/8 at 50.
Grumman Advances
Grumman spurted 3 to 33; the company said it couldn’t account for the gain, but analysts speculated that a friendly acquisition might be arranged with either Penn Central or Boeing.
