Stocks Close Mixed After Early Surge
The stock market finished mixed Wednesday after flirting with new highs early in a turbulent session.
The New York Stock Exchange had its busiest day in nearly 18 months--and its third most active ever--as traders sought to assess the outlook for interest rates.
The Dow Jones average of 30 industrials rose 2.52 to 1,558.94, recording its fifth straight gain. But some other, broader market measures tilted slightly to the minus side.
Big Board volume came to 193.80 million shares, up from 146.22 million on Tuesday. The total was the largest since a 203.05-million-share day on Aug. 6, 1984.
Analysts said hopes for further declines in interest rates worldwide prompted some early buying. The Bank of Japan lowered its official discount rate from 5% to 4.5%.
Given the large flows of money across international borders, Wall Streeters said, declining rates in one major industrialized country can exert a downward influence on rates in the others.
Up 10 Points
At mid-session, the Dow Jones industrial average was up more than 10 points and above the all-time closing high of 1,565.71 that it reached Jan. 7.
A subsequent pullback was ascribed partly to rumors, quickly denied by the Federal Reserve, that Paul A. Volcker, the Fed’s chairman, had ruled out the chance of any cut in the U.S. discount rate in the near future.
Brokers said some sellers also were eager to cash in on gains from the market’s advance over the past five trading days, during which the Dow Jones industrials have climbed 56.65 points.
The NYSE and other markets observed a moment of silence at 11 a.m. EST in remembrance of the crew of the space shuttle Challenger, who perished when the craft exploded shortly after liftoff on a mission Tuesday morning.
Stocks of aerospace companies involved in the shuttle program, which encountered some selling Tuesday, were mixed in Wednesday’s trading. Morton-Thiokol dropped 1/2 to 32, Lockheed rose 1/2 to 46 and Rockwell International was up 5/8 at 35.
Among actively traded blue chips, Ford Motor rose 1 1/2 to 64 1/8, but International Business Machines dropped 3/4 to 151 and American Telephone & Telegraph was down 1/2 at 22 3/8.
Du Pont, which reported higher earnings for the fourth quarter, picked up 1 to 64.
In the credit markets, government bond prices fell and interest rates shot up amid the rumors that the Fed had ruled out a reduction in the discount rate in the near future.
In corporate trading, industrials slid point in moderate dealings, and utilities fell 1/2 point in light activity.
