Stocks Mixed in Slow Trading; Dow Gains 1
Stocks halted their recent slide with a mixed showing in quiet trading Monday, giving the Dow Jones industrial average its first gain in a week.
Trading was the lightest in more than two months as some investors were absent to observe Rosh Hashanah, the Jewish New Year.
Auto and telephone issues paced the gainers, but oil stocks retreated amid renewed suggestions that crude oil prices are headed lower.
The Dow Jones average of 30 industrials edged up 1.46 to 1,309.14 after tumbling 28 points last week.
Many of the market’s broader gauges drifted lower, however, and declines slightly outpaced advances among all New York Stock Exchange-listed issues.
Big Board volume slowed to 66.70 million shares from 111.39 million last Friday. It was the lowest turnover since 62.45 million shares changed hands July 5, which was a Friday after the Fourth of July holiday.
The market’s steep decline last week was attributed in large part to futures-related selling by brokerage houses. The firms bought futures contracts on stock indexes and simultaneously sold the indexes’ underlying stocks to take advantage of their price differences.
Analysts said the so-called program selling is likely to buffet the market again this week but should abate after Friday, when September contracts on index futures, options and various individual stocks all expire.
Oil stocks fell after an authoritative oil publication, the Middle East Economic Survey, said it “confirmed beyond doubt” that Saudi Arabia agreed to sell oil temporarily at market-related prices, undercutting the Organization of Petroleum Exporting Countries’ official prices to increase its depressed sales.
Exxon fell 3/8 to 50 3/4, Chevron lost 3/4 to 35 7/8, Texaco fell 1/8 to 35 1/8 and Mobil was off 5/8 at 28 3/8.
In the takeover arena, Richardson-Vicks jumped 2 1/2 to 51, a 52-week high, and topped the NYSE’s active list after receiving a sweetened takeover bid from Unilever NV of the Netherlands. Unilever said it would pay $56 a share, up from the original $54, if Richardson-Vicks’ directors approve the offer, and $48 if they don’t.
Cessna was unchanged at 29 1/2 in heavy trading after General Dynamics, off 1 7/8 at 71 1/2, initiated its $30-a-share tender offer for all of Cessna’s stock.
McDonald’s rose 1/8 to 65 1/8. The company’s board on Saturday adopted measures to curb a takeover of the fast-food giant even though McDonald’s said it was unaware that anyone was considering such a move.
PPG Industries climbed 3/4 to 44 1/8 after the company said it bought 10.7 million, or 15.4%, of its total shares from several holders.
Polaroid moved up 1/2 to 31 1/2 after a 1.23-million-share block crossed at 31.
Fewer Block Trades
Large blocks of 10,000 or more shares traded on the NYSE totaled 1,226, compared to 2,100 on Friday.
In the credit markets, bond prices mostly rose in quiet trading following sharp gains on Friday.
Yields on 30-year Treasury bonds held steady at Friday’s late level of 10.58%, down substantially from the 10.76% of late Thursday.
A rally was touched off at the end of last week after the release of government economic reports on retail sales and industrial production that were not as strong as had been anticipated.
Analysts say prospects are brighter for further declines in interest rates if economic growth remains sluggish.
Bond Trading Quiet
Bond trading was also quiet because of the observance of the Jewish New Year.
In the secondary market for Treasury bonds, prices of short-term governments were mixed, ranging from a decline of 1/32 point to a gain of 3/32 point, intermediate maturities rose 1/8 point and long-term issues were up as much as 2/32 point.
The Merrill Lynch daily Treasury index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, rose 0.16 to 105.73. The Shearson Lehman daily Treasury bond index, which makes a similar measurement, rose 0.74 to 1,109.56.
In corporate trading, industrials and utilities were unchanged in light trading. Among tax-exempt municipal bonds, general obligations were unchanged and revenue bonds rose 1/8 point in moderate activity.
The federal funds rate, the interest on overnight loans between banks, traded at 7.937%, up from 7.813% late Friday.