Computer, Technology Issues Depress Market
The stock market recorded a moderate loss Friday as sellers shifted their sights to computer and technology issues.
The Dow Jones average of 30 industrials dropped 4.37 to 1,328.74, finishing the week with a net gain of 7.95 points.
Volume on the New York Stock Exchange slowed to 101.17 million shares from 127.54 million Thursday.
The sell-off in the technology group came after a report from Burroughs Corp. late Thursday that it expected to post substantially lower earnings for the third quarter. Burroughs cited a “continued slowdown” in the U.S. computer industry. Burroughs stock fell 7 3/4 to 55 3/4 after a delayed opening.
Among other prominent computer and technology issues, International Business Machines dropped 7/8 to 123 1/2, Digital Equipment 1 to 107, Sperry 1 3/4 to 49 1/2, NCR 1 3/4 to 31 7/8 and Data General 1 to 36 1/2.
Health-Care Issue Falls
The Burroughs announcement came just two days after Hospital Corp. of America issued a disappointing earnings forecast that prompted a sharp decline in another key stock group, health-care issues. Hospital Corp. was still under pressure Friday, falling 3/4 to 29 3/4.
In economic news, the Labor Department reported that the civilian unemployment rate rose to 7.1% in September from 7% the month before. A small uptick in the jobless rate had been predicted by some Wall Street analysts. But other figures in the data on the employment situation were interpreted as evidence of slower than expected economic growth. For instance, manufacturing employment dropped 111,000.
Beatrice led the active list and rose 5/8 to 39 in trading that included a 2.14-million-share block at 38 3/4. The company has been widely discussed as a possible takeover target.
Gould, which has also been the subject of takeover speculation, rose 2 1/8 to 37 in active trading.
First Federal Savings Bank of Arizona jumped 3 to 27 5/8. There was talk that it, too, might be a takeover candidate, but the company said it was aware of no corporate development to explain the activity in its stock.
Revlon Drops
Revlon dropped 1/2 to 53 3/4. Late Thursday, the company announced plans to go private through a leveraged buy-out and divestiture of some of its businesses as a means of thwarting a hostile takeover bid by Pantry Pride.
The daily tally on the Big Board showed about four issues declining in price for every three that gained ground. The exchange’s composite index lost 0.57 to 105.95.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 118.56 million shares.
Standard & Poor’s index of 400 industrials fell 1.54 to 204.62, and S&P;’s 500-stock composite index was down 1.14 at 183.22.
The NASDAQ composite index for the over-the-counter market dropped 0.95 to 280.46.
At the American Stock Exchange, the market-value index closed at 222.80, down 1.20.
Fed Releases Minutes
Bond prices fell after the Federal Reserve disclosed that it made no significant changes in its approach to credit policy at its late August meeting.
According to minutes of the Aug. 20 meeting released Friday, the policy-makers, meeting as the Federal Open Market Committee, voted to maintain essentially the same degree of control over the money supply as they had in previous weeks.
Traders on both sides of the economic fence were wary about making big movements in bonds amid the uncertainty about when the federal government will bring its next big issue to market. The government was forced to postpone its September auction of intermediate and long-term bonds because of congressional inaction on raising the federal debt ceiling.
They were also concerned that international monetary authorities meeting this weekend in Korea may take some additional steps to further the five-nation agreement on lowering the value of the dollar. The agreement among the United States, Britain, Japan, Germany and France was announced Sept. 22.
In the secondary market for Treasury bonds, prices of short-term maturities fell 1/32 point, intermediate maturities fell 6/32 point and long-term issues were off by as much as 1/2 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, fell 0.23 to 105.73 from Thursday’s late level. The Shearson Lehman daily Treasury bond index, which makes a similar measurement, was off 1.79 at 1,109.56.
In secondary trading of short-term Treasury securities, yields on three-month Treasury bills rose 5 basis points to 7.01%. Yields on six-month securities rose 1 basis point to 7.26%, while yields on one-year Treasury bills were unchanged at 7.42%. A basis point is a hundredth of a percentage point.
Yields on 30-year Treasury bonds rose to 10.62% from 10.59% late Thursday.
Among corporate issues, industrials fell point and utilities fell 3/8 point in light trading.
