Stocks Rebound From Early Losses; Dow Off 2
Stocks rebounded from early losses but still fell over a wide front in sluggish trading Wednesday in a near repeat of the previous day’s showing.
The Dow Jones average of 30 industrials slipped 2.47 to 1,326.72 after having lost 6 points earlier in the day. The Dow Jones transportation average also fell, but its utility index gained a fraction.
Declines led advances by about eight to five on the New York Stock Exchange, with airline and drug issues numerous among the casualties.
Big Board volume totaled 85.51 million shares, up from 81.19 million Tuesday.
The NYSE’s big loser was Lear Siegler, which tumbled 7 1/8 to 47 1/2. The company said that outside estimates of its fiscal 1986 earnings were “substantially overstated” and that its own forecast shows profit “somewhat below” fiscal 1985’s record level.
In the health-care sector, Hospital Corp. of America fell 1 to 44 1/2, Humana lost to 30 and Pfizer dropped 5/8 to 47.
Westinghouse fell 3/8 to 38 after a 1-million-share block crossed at 38 3/8.
On the upside, Southdown jumped 5 1/8 to 46 1/8. Wendell Phillips, corporate secretary for the energy and cement concern, said he couldn’t account for the gain.
Datapoint climbed to 5 3/8, a 52-week high, after Datapoint Chairman Asher B. Edelman proposed a $6-a-share leveraged buy-out of the computer maker.
Elsewhere on the NYSE’s active list, Beatrice slipped 1/8 to 33 7/8, Union Carbide fell to 55, Scott Paper climbed 1 to 41 and Unocal moved up 1/8 to 29 5/8.
Large Blocks Increase
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 104.95 million shares. Large blocks of 10,000 or more shares traded on the NYSE totaled 1,619, compared to 1,415 on Tuesday.
In credit markets, government bond prices rose as traders sought the safety and liquidity of U.S. Treasury securities because of concern about loan problems in the $74-billion federal farm-credit system.
Yields on 30-year Treasury bonds fell to 10.40% from 10.46% on Tuesday and 10.48% at the end of last week. Yields on short-term Treasury bills fell about a tenth of a percentage point.
In the secondary market for Treasury bonds, prices of short-term governments rose about point, intermediate maturities rose point to 5/8 point and long-term issues were up 5/8 point to 3/4 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.
In corporate trading, industrials and utilities rose point in light trading. Among tax-exempt municipal bonds, general obligations were unchanged in light trading and revenue bonds were unchanged in moderate activity.
The federal funds rate, the interest on overnight loans between banks, traded at 7.5%, down from 8.25% on Tuesday.