Dow Slips 6.75; Railroad Issues Take Big Losses
Railroad issues suffered some of the biggest losses as the stock market declined moderately Thursday.
Analysts said traders, still cautious about the economic outlook, shied away from extending the mild rally in stock prices since the start of the week.
The Dow Jones average of 30 industrials, up 20.39 points from Monday through Wednesday’s close, dropped back 6.75 to 1,791.62.
Volume on the New York Stock Exchange came to 134.71 million shares, against 133.27 million on Wednesday.
The Dow Jones industrials briefly climbed above 1,800 in Wednesday’s activity, but then fell back.
Recent economic figures have suggested that the pace of business activity may be at least a little stronger than traders feared a couple of weeks ago, when they were busy dumping stocks.
But brokers said there was apparently nothing in the news to prompt a revival of Wall Street’s bull market just yet.
Declines in interest rates and weakness in commodity prices lately have been seen by investors as symptoms of a sluggish economy, rather than harbingers of better business conditions in the future.
Rail Issues Skid
In the rail group, Santa Fe Southern Pacific led the NYSE active list and fell 2 to 28. The Interstate Commerce Commission rejected a merger of the Santa Fe and Southern Pacific railroads in a decision that would apparently force the parent holding company to divest itself of one of the two.
Burlington Northern, subject of reduced earnings estimates by a brokerage house analyst, dropped 4 to 52 1/2.
With stocks like those weighing it down, the Dow Jones average of 20 transportation issues tumbled 11 points to 715.38.
Large blocks of 10,000 or more shares traded on the NYSE totaled 2,636, compared to 2,659 on Wednesday.
Prices slid in the bond market as hopes for lower interest rates dimmed. Yields on short-term Treasury issues were mixed.
In the secondary market for Treasury securities, prices of short-term governments were down 2/32 point, intermediate maturities dropped by 9/32 point to 3/4 point and long-term issues were off by between 1/2 point and a full point, according to the investment firm of Salomon Bros. Yields on three-month Treasury bills rose 1 basis point, or a hundredth of a percentage point, to 5.80%.
