Dow Gains 5.48 as Market Pulls Out of Decline
The stock market rebounded from its steep drop over the past eight sessions to post a modest gain Wednesday.
But the advance faded in late trading, and prices finished well below their best levels of the day.
The Dow Jones average of 30 industrials, up about 15 points at mid-session, closed with a 5.48 gain at 1,774.18. From July 2 through Tuesday’s close, the average fell more than 140 points.
Wednesday’s volume on the New York Stock Exchange slowed to 160.81 million shares from 183.98 million on Tuesday.
SoCal Edison Drops
Southern California Edison was the Big Board’s third most actively traded issue as 1.8 million shares changed hands, dropping as low as 31 1/8, down 2 1/8, before closing at 32 1/2, down 3/4 for the day.
The early heavy selling appeared to be triggered by investor confusion arising over the formal filing late Tuesday of a Public Utilities Commission staff recommendation, first made public last year, that Edison shareholders absorb up to $1.1 billion in disputed construction costs for the $4.5-billion San Onofre Nuclear Generating Station in northern San Diego County.
The filing on behalf of the commission’s public staff division, which represents utility customers, followed lengthy public hearings on the cost issue. Final arguments are scheduled for this fall, with a ruling by the five commissioners expected by the end of the year.
Savings and loan stocks were a bright spot, responding to favorable earnings reports in the industry. CalFed gained 1 3/8 to 40, Great America First Savings 1 1/2 to 23 1/8, Golden West Financial 1 1/8 to 44 1/8, Gibraltar Financial 7/8 to 13 1/8 and Great Western Financial 5/8 to 46 1/8.
Bond Prices Sag
IBM, which has been under pressure since the company reported weaker-than-expected second-quarter earnings Monday, dropped 2 5/8 to 133 1/8, bringing its loss from last week’s close to 10 points.
New York State Electric & Gas led the NYSE active list, down 1/2 at 35 on turnover of more than 6 million shares, including several large blocks. The heavy volume was attributed to activity by investing institutions moving to capture the firm’s quarterly dividend.
In the bond market, government bond prices sagged and interest rates bounced up as the credit markets sorted through the latest economic news for clues about the future course of interest rates and monetary policy.
The Treasury’s 30-year bond fell 9/16 point, or slightly more than $5 for each $1,000 in face amount. The price drop, which more than erased Tuesday’s gain, raised the key bond’s yield to 7.16% from 7.11% late Tuesday.
