Wall St. Applies Brakes, Dow Down a Modest 8.38 : Reagan Is Optimistic on Upturn

Bears barely kept control of the stock market today, pushing prices moderately lower a day after the Dow Jones industrial average had its biggest single-day point drop on record.

The Dow Jones average of 30 industrials fell 8.38 to 1,518.23. Big Board volume totaled 176.46 million shares, against 180.33 million in the previous session.

Losers outpaced gainers by 5 to 1 on the New York Stock Exchange.

The NYSE’s composite index fell 1.33 to 118.87.

Wall Street analysts predicted the market would continue to be volatile, possibly for weeks, although many said they expect the bulls to reassert themselves eventually.

The Dow Jones industrials had climbed almost without pause nearly 270 points from late September through Tuesday, which was the latest in a string of record-setting days.

“What you’re seeing is the next-day syndrome,” Larry Wachtel, a first vice president of Prudential-Bache Securities Inc., said early in the session.

In Washington, White House spokesman Larry Speakes called Wednesday’s record drop an aberration and said President Reagan is “taking bets” that the market will rebound.

Asked by reporters for Reagan’s reaction to the worst one-day decline in the blue chip stock indicator’s history, Speakes replied that Reagan believes the market will bounce back.

“The stock market will go up and he’s taking bets on July 1--will it be up or down from the present,” Speakes said.

After soaring to a record level on Tuesday, the Dow Jones average fell the next day 39.10 points to a close of 1526.61. On Oct. 28, 1929, the market fell 38.33 points. But the 1929 plunge amounted to a 12.8% loss in the Dow average, compared with Wednesday’s 2.5% change.

To counter assertions that the market turnabout might be more than a one-time slide, Speakes offered reporters a copy of one of his briefing papers titled, “Beryl Sprinkel’s View of Stock Market Drop.”

Sprinkel, chairman of the President’s Council of Economic Advisers, advised against predicting the future but offered to take bets against a repeat of the 1929 stock market crash.