Stocks Decline in Quiet Trading; Dow Off 8.94
The stock market got off to a sluggish start in 1986, drifting lower in quiet trading Thursday.
The Dow Jones average of 30 industrials, down more than 12 points at its lowest levels of the day, was off 8.94 at 1,537.73 by the close.
Analysts found no specific news to account for the market’s weakness. They said hopes remained generally high for solid growth in the economy and corporate profits in 1986.
The Commerce Department predicted that the new year “should be a good year, by and large better than 1985” for most industries, especially in the service sector.
Sell Orders
However, brokers said stocks appeared to be weighed down by sell orders from investors looking to cash in on the market’s gains in 1985, when the Dow Jones industrial average soared 27.66%.
They also noted that the market no longer benefited from year-end buying by investing institutions to prepare their portfolios for reports to employers and clients.
Furthermore, some market watchers pointed out that hopes for a reduction in the Federal Reserve’s discount rate, which have been running high for the past couple of months, had not yet been fulfilled.
Volume on the New York Stock Exchange came to 98.96 million shares, down from 112.65 million on Tuesday, before the New Year’s holiday.
Occidental Petroleum led the active list, unchanged at 31, while Midcon was down 1/8 at 69 3/8. Occidental agreed to acquire Midcon for cash and stock, topping a hostile bid for the company by an investor group.
Union Carbide climbed 2 3/8 to 73 and GAF tumbled 5 3/4 to 53. GAF raised its hostile takeover offer for Union Carbide to $78 a share from $74.
Carbide countered with an announcement of several planned moves: the purchase of 38.8 million of its shares from among 56.7 million tendered to it under an exchange offer, a 3-for-1 stock split and a dividend increase. The company also said it would sell its consumer products businesses.
IBM Among Losers
Toys ‘R’ Us fell 1 3/4 to 33 3/8. The company’s report that its sales in November and December rose 13.8% from a roughly comparable period in 1984 fell short of some Wall Street expectations.
Losers among the blue chip industrials included International Business Machines, down 3 1/2 at 152; American Telephone & Telegraph, down 3/8 at 24 5/8, and Du Pont, off 1 1/2 at 66 3/8.
In the daily tally on the Big Board, advances outnumbered declines by about nine to seven. Large blocks of 10,000 or more shares traded on the NYSE totaled 1,625, compared to 2,188 on Tuesday.
Bond prices edged downward in quiet trading. Rates on short-term Treasury bills rose.
