Stocks Mixed on Slow Volume; Dow Up 3.58
Stocks were mixed Monday as Wall Street showed that it still lacks conviction about the economy’s outlook.
The uncertainty remained evident in New York Stock Exchange trading volume, whose daily tally has now gone more than a month without exceeding 100 million shares. Big Board volume slowed to 89.85 million shares from 95.04 million Friday.
General Foods Jumps
The Dow Jones average of 30 industrials climbed 3.58 to 1,339.27, thanks to a surge by one of its components, General Foods, which jumped 7 1/8 to 87 1/2 amid renewed rumors that it is a takeover target.
“Take General Foods out and you had nothing,” Ralph Acampora, technical analyst at Kidder, Peabody & Co., said of the average’s performance.
Gainers overall slightly led losers on the NYSE, whose composite index edged up 0.07 to 109.12.
Oil, aerospace and bank issues were numerous among the losers, while computer, drug and paper stocks moved ahead.
Prices edged lower shortly after the opening bell, then quickly recovered and spurted moderately ahead, with blue-chip and technology stocks leading the way. But the advance also was short-lived and prices remained narrowly mixed in the session’s final two hours.
The market failed to sustain the upward momentum that it showed Friday, when prices rose following the government’s report that the civilian jobless rate fell to 7% last month from 7.3% in July.
The upswing had triggered speculation that investors might now view the economy as growing stronger and that such an outlook could be further supported later this week when the government issues its next batch of major economic indicators.
Investors Skeptical
The reports to be released include August data on retail sales, industrial production and wholesale prices.
But some analysts said investors would remain skeptical about whether the economy was rebounding until they see those reports, with the market continuing to waver in the meantime.
General Foods’ surge, which lifted it to a 52-week high, came as rumors resurfaced that Philip Morris is interested in acquiring the company. Philip Morris, off 1 3/8 at 80 3/8 and General Foods declined comment on the rumors.
Another big gainer was Richardson-Vicks, which jumped 6 1/8 to 46 1/8 and topped the NYSE’s active list. The company said its board rejected an unsolicited $54-a-share acquisition bid by Unilever NV of the Netherlands.
Coca-Cola fell 1 to 69 in heavy activity. The stock initially rose after the soft-drink maker said it planned to repurchase up to 5 million of its shares. But it later retreated amid reports that a brokerage firm cut its estimate of Coca-Cola’s 1985 earnings.
Oil stocks edged lower after European sources said the Soviet Union boosted the price of its major grade of exported oil by 40 cents to 50 cents a barrel. But analysts said they did not believe that the higher prices could be sustained because world demand for oil remained below anticipated levels of supplies.
Amoco lost 1/2 to 64, Chevron fell 1/2 to 37, Exxon was off 1/8 at 52 3/8 and Texaco dropped 1/2 to 36.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 109.69 million shares.
Large blocks of 10,000 or more shares traded on the NYSE totaled 1,711, compared to 1,931 on Friday.
Standard & Poor’s index of 400 industrials rose 0.07 to 209.48 and S&P;’s 500-stock composite index inched up 0.01 to 188.25.
The Wilshire index of 5,000 equities closed at 1,947.073, up 1.054.
At the American Stock Exchange, the market-value index slipped 0.03 to 232.41.
The NASDAQ composite index for the over-the-counter market closed at 296.06, down 0.13.
Bond Prices End Mixed
In the bond market, prices were mixed.
In the secondary market for Treasury bonds, prices of short-term governments rose 1/32 point, intermediate maturities rose 2/32 point and long-term issues were up 2/32 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 0.01 to 105.21. The Shearson Lehman daily Treasury bond index, which makes a similar measurement, rose 0.33 to 1104.67.
In corporate trading, industrials were off 1/2 point in moderate trading and utilities were unchanged in light trading.
Among tax-exempt municipal bonds, general obligations were unchanged and revenue bonds were down 1/8 point. Trading was light.
Yields on three-month Treasury bills were unchanged at 7.25%. Six-month bills were unchanged at 7.42% and one-year bills were unchanged at 7.60%.
Yields on 30-year Treasury bonds fell to 10.70% from 10.71% on Friday.
The federal funds rate, the interest on overnight loans between banks, traded at 7.875%, up from 7.563% on Friday.
