Retail Stocks Advance Sharply; Dow Falls 15
The stock market turned downward Monday as blue-chip issues reversed course after Friday’s late upsurge. Retailing stocks advanced broadly, however, in buying inspired by takeover news and speculation. Airline stocks also rallied.
The Dow Jones average of 30 industrials, up 23.68 on Friday, dropped 15.28 to 1,864.26.
Volume on the New York Stock Exchange retreated to 123.75 million shares from 149.14 million on Friday.
Analysts said some traders were cashing in on the rise in many blue-chip issues late Friday, which was attributed to program trading involving stock index options and futures that were nearing expiration.
In theory, the advance was artificial because it was induced by temporary technical forces.
Lower Economic Growth
But market watchers said they didn’t expect it to take very long for investors to put the latest “triple witching hour” episode out of their minds and begin concentrating on such fundamentals as interest rates and the economy.
Most Wall Streeters now are convinced that growth in the second quarter will come in below earlier expectations, as it did in the first three months of the year. However, that sluggishness is widely thought to have improved the chances that the Federal Reserve might decide on another reduction in its discount rate.
Associated Dry Goods, which received an offer to be acquired by May Department Stores, soared 18 7/8 to 64 7/8, while May’s stock slumped 4 3/4 to 83.
Buying spilled over into many other retailing issues on conjecture that they might become takeover targets as well. Allied Stores climbed 2 to 47 5/8, Federated Department Stores 2 to 87 7/8, K mart 1 to 53 3/8 and Zayre 1 1/8 to 85 1/8.
Airline issues also were strong, taking off late in the session after People Express said it was considering the sale of all or part of its business. People Express, which has been a prime force in fare competition in the industry, lost 1/2 to 5 1/2 in over-the-counter trading.
Airline Issues Gain
UAL rose 2 7/8 to 54 5/8, Delta Air Lines 2 3/8 to 43, U.S. Air Group 3 3/8 to 34 and AMR 3 3/4 to 56.
Baxter Travenol Laboratories dropped 3/8 to 18 7/8. The company said it filed for a proposed secondary offering of as many as 2.5 million shares held by its profit-sharing plan.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 146.97 million shares.
In the bond market, prices moved mostly higher, but short-term interest rates were little changed.
Bond market analysts said trading was light to moderate in advance of this week’s sale of $14 billion in new Treasury notes. The government plans to sell $7.25 billion in four-year notes today and $6.75 billion in seven-year notes Wednesday.
