Dow Climbs Beyond 1,500 but Retreats : Ends Day Off 1.49; Volume on Big Board Is 4th Heaviest Ever
The stock market finished mixed Thursday in a busy session during which the Dow Jones industrial average climbed above the 1,500 mark for the first time.
After seesawing most of the day between moderate and sharp gains, the Dow Jones average of 30 industrials was down 1.49 to 1,482.91 at the closing bell. The blue chip index relinquished an 11-point gain in the final hour.
Volume on the New York Stock Exchange reached 181.01 million shares traded--the fourth-highest total on record. On Wednesday, 153.16 million shares changed hands.
Trading in the over-the-counter market swelled to a record volume.
Analysts have been expecting the market to pause from the rally that has continued almost uninterrupted since early autumn.
The market chalked up hefty gains Wednesday, with the Dow Jones industrials and an array of other trading barometers surging to record levels.
Investors flocked to the market again Thursday and professional buying programs were set in motion. But the sellers came, too, and seized the opportunity to take profits.
Interest-Rate Hopes
Enthusiasm about the outlook for interest rates has whetted investors’ appetites for stocks over the past few months.
Hopes have abounded that lower interest rates will lay the groundwork for better economic conditions in 1986, which could translate into higher corporate profits. Additionally, investors perceive positive implications in the dollar’s decline. A falling dollar, they reason, could aid multinationals and manufacturing businesses that have been losing sales to foreign competitors.
One of the most actively traded stocks, Texaco, closed up 1/8 at 31 7/8. A judge heard testimony at a hearing in Houston to decide whether to uphold a jury’s finding that Texaco used improper tactics in breaking up a proposed merger agreement between Getty Oil and Pennzoil. The jury said Texaco should pay $10.53 billion to Pennzoil.
Also actively traded, Viacom fell 6 1/8 to 57 3/8. A major real estate syndicator, JMB Realty, revealed in a filing with the Securities and Exchange Commission that it has acquired an 11.6% stake in Viacom, which has been a subject of takeover speculation. But JMB Realty said it had no plans to seek control of Viacom.
Leading the list of actively traded issues, Pacific Gas & Electric, was up 1/8 to 19 5/8.
Financial service and brokerage firms were the focus of some investor attention. American Express closed up 1/4 to 50 1/4 and Merrill Lynch slipped 1/8 to 34 1/4.
Elsewhere among blue chips, International Business Machines fell 1 1/8 to 140 3/4 and American Telephone & Telegraph was off 3/8 to 23 5/8.
Among retail stocks, Sears, Roebuck fell 1/8 to 37 5/8, J. C. Penney fell 5/8 to 54 3/8 and K mart rose 1/4 to 35 1/8. Woolworth was up 5/8 to 59 3/4.
The retailers reported poor sales for November, compared to a year ago, but said that they had strong volume in the days following Thanksgiving and that they remain cautiously optimistic about the crucial Christmas selling season.
Mesa Proposal Approved
Mesa Petroleum closed off 3/8 at 17 1/8 in active trading. On Wednesday, Mesa stockholders approved a proposal by company Chairman T. Boone Pickens Jr. to reorganize the company into a master limited partnership. The new partnership units are to be distributed around the end of the year.
In the daily tally on the Big Board, issues rising in price held a narrow lead--less than eight to seven--over those declining.
Large blocks of 10,000 or more shares traded on the NYSE totaled 3,723, compared to 3,211 on Wednesday.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 211.64 million shares.
Standard & Poor’s index of 400 industrials fell 0.51 to 226.73, and S&P;’s 500-stock composite index was off 0.35 to 203.88.
Volume in over-the-counter stock trading established a new record of 141.48 million shares, topping the previous peak of 122.20 million set on Aug. 3, 1984.
In the credit markets, most bond prices finished lower and interest rates moved slightly higher during a generally quiet session.
Little Reaction to M1 Rise
A Federal Reserve Board report that the nation’s money supply rose $4.4 billion in the week ended Nov. 25 came close to expectations and produced little reaction in the credit markets.
In the secondary market for Treasury securities, prices of short-term governments fell 1/16 point, intermediate maturities went down between 1/16 point and 1/8 point and long-term issues declined 5/32 point.
The Merrill Lynch daily Treasury index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, dipped 0.05 to 108.58. The Shearson Lehman daily Treasury bond index, which makes a similar measurement, fell 1.16 to 1,138.57.
In corporate trading, industrials and utilities fell 1/8 point in light trading.
Among tax-exempt municipal bonds, revenue bonds rose 1/4 point in active trading while general obligations were unchanged in quiet dealings.
Yields on three-month Treasury bills rose seven basis points to 7.28%. Six-month bills rose seven basis points to 7.35%, while one-year bills went up five basis points to 7.37%.
The federal funds rate--the interest charged on overnight loans between banks--traded at 8.25%, compared to 8.675% late Wednesday.
