Dow Trims Losses but Ends Day 4.93 Lower
Stock prices closed mixed Friday after an erratic session marked by disappointment over the latest earnings report from International Business Machines.
The Dow Jones average of 30 industrials dropped 4.93 to 1,536.70, reducing its gain for the week to 23.17 points.
Volume on the New York Stock Exchange came to 132.13 million shares, against 130.46 million Thursday.
Early in the session, IBM reported fourth-quarter earnings of $4.36 a share, against $3.55 in the last three months of 1984.
Though that represented a significant improvement, it fell a bit short of some Wall Streeters’ expectations. Furthermore, it left the company with a slight decline in profits for the full year.
John Akers, IBM president and chief executive, said: “There is an absence of convincing evidence the North American economy is showing sustained improvement, and we are approaching 1986 with caution.”
Digital Bucks Trend
IBM shares, which are frequently described as a market “bellwether,” dropped 5 1/8 to 150 7/8 as the most active NYSE issue.
Most other major computer issues also lost ground. But Digital Equipment, which posted better-than-expected quarterly profits earlier in the week, continued its recent advance with a 1 7/8 gain to 147 7/8.
There was some stronger-than-expected economic news in the government’s report that housing starts rose 17.5% in December to their highest level since last April.
The Dow Jones industrial average briefly tumbled to a deficit of more than 10 points about half an hour before the close. Analysts attributed the drop to selling by traders engaged in complex strategies involving blue chip stocks and options on stock market indexes, some of which were approaching expiration. After that brief slide, the average recovered more than half of its loss in the session’s last few minutes.
Energy stocks fell for the second straight day, weighed down by slumping world oil prices. Exxon lost 1/2 to 52 1/4, Mobil 1/2 to 30 1/4, Schlumberger 3/4 to 34 1/8 and Chevron 1/8 to 36 3/8.
Orion Capital Drops
Federal Express, which reported an increase in the volume of packages and documents that it handles, rose 2 1/2 to 59 1/2. The stock helped the Dow Jones average of 20 transportation stocks climb 4.15 points to 716.64.
Orion Capital dropped 1 1/4 to 29. The company said it expects to show a significant loss from operations, before investment gains, for the last quarter of 1985.
The NASDAQ composite index for the over-the-counter market rose 0.71 to 330.72, hitting a record high for the second straight day.
Bond prices finished with only minor changes and interest rates hovered near recent levels in subdued trading.
The yield on the benchmark 30-year Treasury bond stood at 9.43%, up slightly from Thursday’s revised late yield of 9.41%. Salomon Bros. said Thursday that the yield was 9.49%, but Friday it said the return was calculated incorrectly due to computer errors.
