Market Posts Scattered Losses; Dow Index Off 4.13
The stock market posted some scattered losses today, retreating after Thursday’s rise to new highs.
The Dow Jones average of 30 industrials slipped 4.13 to 1,435.09, reducing its gain for the week to 30.73 points.
Declines outpaced advances by about eight to seven on the New York Stock Exchange.
Big Board volume totaled 130.24 million shares, against 124.93 million in the previous session.
The NYSE’s composite index lost 0.47 to 114.35.
At the American Stock Exchange, the market-value index was up 0.53 at 237.76.
Analysts said demand for stocks faded a bit after interest rates turned upward in the credit markets on Thursday.
The change of direction in open-market interest rates came as the Treasury announced plans to sell $22 billion in short-term cash management bills today and a total of $61 billion in new debt securities over the next two weeks.
This morning, the Labor Department reported that the producer price index of finished goods jumped 0.9% in October, for its biggest increase in more than four years.
The figure apparently spooked some traders who have been counting on a continued flow of favorable inflation news. However, analysts noted that the producer price index had fallen significantly in August and September.
Even with its October increase, it stands about where it was in midsummer.
Bond prices were mixed in light trading early today, surprising some analysts who had expected a flood of new Treasury issues to continue driving prices sharply lower in the securities market.
“It’s holding up pretty well under the circumstances,” said Ray Stone, manager of financial economics at the New York investment firm Merrill Lynch Capital Markets.
The Treasury announced Thursday that it will sell $61 billion of new debt over the next two weeks, including $22 billion of short-term cash management bills today, and bond prices fell immediately afterward.
The announcement followed the congressional decision to increase the government’s borrowing authority to avert an unprecedented default.
Some analysts attributed the market’s mixed performance to economic news from Washington that showed persistently sluggish economic growth, which sometimes tends to drive bond prices higher.
