Market Drifts to Broad Loss; Dow Falls 5.04
Stocks drifted to a broad decline in quiet trading Friday to close out a lackluster week.
The downturn was led by computer, aerospace, oil and financial issues. But mining stocks moved ahead.
The Dow Jones average of 30 industrials fell 5.04 to 1,312.61, giving it a loss for the week of 8.18 points. It was the fourth consecutive weekly decline in the blue-chip average, during which it has tumbled 46.93 points.
Losers outpaced gainers by more than two to one on the New York Stock Exchange, whose composite index lost 0.68 to 107.91.
Big Board volume totaled 87.91 million shares, compared to 86.10 million Thursday.
Earlier this week, the market had repeatedly opened higher and then pulled back in afternoon trading. But, on Friday, the majority of prices were on the downside throughout the session.
The slide came amid indications of continued weakness in the economy.
The Commerce Department said housing starts fell 2.4% last month to a seasonally adjusted annual rate of 1.65 million units. Many economists had looked for a July gain because of recent declines in mortgage rates.
The Federal Reserve said Thursday that consumer credit outstanding rose $6.8 billion in July, down from gains of $8 billion to $9 billion in the previous four months. Economists said the July increase might indicate a slowdown in consumer spending.
Meanwhile, the expiration of several stock-index futures apparently did not produce the late volatility in prices for which Wall Street had braced.
On previous expiration days, prices took sharp swings in late trading as professional traders closed out positions in both the options and in the stocks that comprise the indexes. The traders had staked the positions in the hope of profiting on the differences in price between the stocks and the index options.
Pan Am Active
Middle South Utilities fell 1 1/2 to 9 1/8 and topped the NYSE’s active list.
Also active were Pan American World Airways, up at 8; International Business Machines, down 5/8 to 125 3/4; U.S. Steel, off 1/2 at 29, and Union Carbide, up 3/8 to 52 3/8.
Manufacturers Hanover slipped 1/8 to 37 5/8. The bank holding company declared a 2-for-1 stock split and raised the dividend on pre-split shares.
Mining stocks advanced as the price of gold rose $5 an ounce, to 337.50, in New York after climbing $6.30 on Thursday.
Homestake Mining rose to 27 1/8, Hecla Mining moved up to 17 1/2 and Sunshine Mining gained 1/2 to 7.
Trans World Airlines fell to 22 1/2. Investor Carl C. Icahn, who owns 45.5% of TWA’s stock, issued a statement after the close saying that he opposes a rival effort by Texas Air to buy TWA. Texas Air slipped 1/8 to 19 on the American Stock Exchange.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 108.47 million shares.
Standard & Poor’s index of 400 industrials fell 1.23 to 206.80, and S&P;’s 500-stock composite index was down 1.16 to 186.10.
At the Amex, the market-value index fell 1.17 to 231.69.
The NASDAQ composite index for the over-the-counter market closed at 296.46, down 1.15.
The Wilshire index of 5,000 equities closed at 1,928.860, down 11.945.
Bond Price Rebound
Large blocks of 10,000 or more shares traded on the NYSE totaled 1,606, compared to 1,677 on Thursday.
Bond prices rebounded in the wake of the government economic reports.
Prices had fallen Thursday because of a larger than expected $5.3-billion surge in the nation’s basic money supply in early August. Analysts said in the wake of that report that the Federal Reserve Board will not likely relax its monetary policy with such rapid money growth. The Fed tries to allow enough money growth to assure steady, non-inflationary economic growth.
But Friday, the pressure for some sort of accommodation grew after the reports on housing construction and factory operating rate were released.
In the secondary markets, short-term governments rose point, intermediate maturities were up by between 1/2 point and a full point and long-term issues were up 1 3/8 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, rose 0.53 to 106.15 from Thursday’s close. The Shearson Lehman daily Treasury bond index, which makes a similar measurement, rose 6.70 to 1,113.58.
In corporate trading, industrials rose 3/4 point and utilities were up 3/4 point in light trading, Salomon Bros. said.
