Stocks Mixed in Quiet Trading; Dow Slips 4
The stock market turned in a mixed showing Thursday, running into some resistance at record or near-record highs.
Oil and auto issues posted some of the most notable losses in a quiet, drifting session. The Dow Jones average of 30 industrials slipped 4.36 to 1,900.17.
Volume on the New York Stock Exchange slowed to 125.08 million shares from 143.27 million on Wednesday.
In the overall tally on the Big Board, advancing issues held a slight edge on declines. The exchange’s composite index of all its listed common stocks slipped 0.17 to 145.24.
The session began with a round of selling that pushed the Dow Jones industrials down more than 10 points. After that, analysts said declining interest rates in the bond market helped stocks recover from their lows of the day.
Before the opening, the government reported that the index of leading economic indicators rose 1.1% in July. That exceeded most private economists’ advance estimates. However, brokers said rumors of the 1.1% figure circulated Wednesday on Wall Street, and the news apparently had little surprise effect on the markets.
Analysts said many market participants remained skeptical about the staying power of the recent rally in stock prices, and some of them apparently began selling to cash in profits before the long Labor Day weekend.
GM Lower
The three days before Labor Day have historically been a strong period for the market. But followers of this phenomenon note that it has become less consistent in the past seven or eight years.
General Motors dropped 1 to 73. The company announced a new sales incentive program aimed at reducing inventories of unsold cars. Among other auto issues, Ford Motor fell 1 1/2 to 61 5/8 and Chrysler was down 1 3/8 at 39 3/4.
Energy stocks, which have taken a leading role in the market’s recent rally, turned weak. Mobil lost 1 to 36, Occidental Petroleum fell 1/8 to 29 1/2, Exxon fell 3/8 to 69, Atlantic Richfield fell 7/8 to 57 5/8, Amoco fell 3/8 to 68 5/8 and Chevron lost 1 1/8 to 43 3/4.
Another drag on the market was International Business Machines, which dropped 1 1/8 to 140 in active trading. A brokerage house lowered its earnings estimates for the company this year and next.
Securities industry stocks, by contrast, had a good day, with First Boston up 1 1/2 at 53 1/2, Merrill Lynch up 2 at 38 3/4, E. F. Hutton up 2 3/4 at 41 7/8, Morgan Stanley up 5/8 at 75 3/8 and Salomon Bros. up 7/8 at 46 3/4.
Florida Progress was the most active NYSE-listed issue, off to 45 3/8. Safeway Stores was second, up 1/8 to 66 1/2. Mobil was third, down 1 to 36.
Weatherford International led the American Stock Exchange actives list, up 1/8 to 1 1/8. Amdahl followed, gaining 3/8 to 20 1/2. Wickes was third, unchanged at 5 1/8.
Home Shopping Network, which gained 13 on Wednesday, was 11th most active Thursday, climbing another 5 3/4 to $129.
Bond Prices Edge Up
In the bond market, prices edged up in thin trading amid speculation that the U.S. trade deficit for July would be larger than expected and that a report from purchasing managers would reveal more disappointing news about the economy.
The bellwether 30-year bond, which rose about 1/2 point, or $5 per $1,000 face value, by mid-morning, increased just 3/16 point in late trading to yield 7.26%, down from 7.27% late Wednesday.
“It was all rumors the whole day,” said Jay Goldinger of the Beverly Hills investment banking firm of Cantor, Fitzgerald & Co.
But William Sullivan, director of money-market research for Dean Witter Reynolds, cautioned that “you have to have some respect for these rumors for the time being. The leading indicators rumors were accurate.”
Dealers said a report by the Fed that the nation’s basic money supply, known as M1, rose $3.1 billion in mid-August had little effect on the bond market.
In the secondary market for Treasury bonds, prices of short-term governments rose 1/32 point, intermediate maturities rose 1/16 and 20-year issues were up 7/16 point, according to the investment firm of Salomon Bros.
