Market Takes Breather as Dow Slips a Fraction
The stock market was little changed Thursday at the close of an erratic session.
Stocks involved in takeover news and rumors provided most of the action as the market struggled to recover from the sell-off in health-care issues Wednesday.
The Dow Jones average of 30 industrials slipped 0.56 to 1,333.11.
Volume on the New York Stock Exchange tailed off to 127.54 million shares from Wednesday’s 2 1/2-month high of 147.33 million.
Health-Care Stocks Drop
Health-care stocks took a drubbing Wednesday as two hospital-management companies, Hospital Corp. of America and American Medical International, issued disappointing earnings statements.
Some of them remained under pressure Thursday. Hospital Corp. dropped 3/4 to 30 1/2 and AMI 5/8 to 16 5/8.
The leading health-care stocks have a wide following among investing institutions, and analysts said their sudden tumble came as a jolt to the general market.
Brokers said unpleasant surprises from companies that had been relied on for steady earnings growth dampened hopes for an overall improvement in corporate profits resulting from a strengthening economy.
One item on the market’s agenda for today is the government’s monthly report on the employment situation. Advance estimates on Wall Street call for no change, or possibly a slight increase, in the unemployment rate for September.
In Thursday’s trading, takeover rumors and speculation prompted buying in Gould, up 4 at 34 7/8, and Texas Oil & Gas, up 1 3/4 at 18 1/2.
Revlon slipped 1/8 to 54 after trading at 52-week highs. An agreement was announced after the close for a buy-out of the company by the firm of Forstmann, Little & Co. at $56 a share. Revlon has been fighting a hostile takeover bid by Pantry Pride.
Silver-Mining Shares Strong
Silver-mining issues were strong on word that the Hunt family of Texas had sold off most of the huge silver holdings that it amassed in an abortive investment venture more than five years ago. Callahan Mining picked up 1 1/8 to 18 1/8, Hecla Mining 1 3/8 to 16 3/4 and Sunshine Mining 5/8 to 6 3/8.
Auto stocks were mixed, despite another round of big gains in domestic car sales during the last third of September. General Motors rose 5/8 to 68 1/8, but Ford Motor lost 1/8 to 45 5/8 and Chrysler was down 1/8 at 36 3/4.
Sierra Spring Water, traded on the American Stock Exchange, fell 4 to 11 1/8. The company said it expected to report lower per-share profits for the third quarter, in part because of an increase in the number of shares outstanding.
Gainers slightly outnumbered losers in the daily tally on the Big Board. Large blocks of 10,000 or more shares traded on the NYSE totaled 2,463, compared to 2,976 on Wednesday.
Bond prices slipped.
In the secondary market for Treasury bonds, prices of short-term maturities were off 3/32 point, intermediate maturities were off by between 5/32 point and 3/8 point and long-term issues were off by as much as 10/32 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.
Among corporate issues, industrials and utilities fell point in light trading.
In the municipal market, general obligations and revenue bonds rose 1/8 point in moderate activity.
In secondary trading of short-term Treasury securities, yields on three-month Treasury bills fell 4 basis points to 6.96%. Yields on six-month securities rose 3 basis points to 7.25%, while yields on one-year Treasury bills were up 4 basis points at 7.42%. A basis point is a hundredth of a percentage point.
Yields on 30-year Treasury bonds rose to 10.59% from 10.56% on Wednesday.
The federal funds rate, the interest on overnight loans between banks, traded at 7.875%, unchanged from Wednesday.
