Dow Drops 14 as Interest Rate Jitters Mount : Index Hits Lowest Level in Nearly 6 Months
The Dow Jones industrial index fell to its lowest level in nearly six months on Monday in selling attributed to concern over rising interest rates and the outlook for the dollar.
The index, down more than 30 points at midday, closed with a 14.49 loss at 1,755.20. Even with its late comeback, the average finished at its lowest closing level since it stood at 1,735.51 on April 7.
Volume on the New York Stock Exchange came to 115.61 million shares, against 115.27 million on Friday.
Over the 17 trading days since the Dow Jones industrials hit a record closing high of 1,919.71 on Sept. 4, the average has fallen 164.51 points, or 8.6%.
Analysts said traders were unhappy that financial leaders of the United States and other leading industrialized countries didn’t make much apparent progress over the weekend in meetings in Washington on interest rate policies, the dollar and international trade imbalances.
Bond Prices Decline
No big breakthrough had been expected. Nevertheless, brokers said the situation left investors wondering what could be done to deal with the problem of the U.S. trade deficit.
Bond prices also fell Monday in reaction to the lack of progress in the talks.
The key 30-year Treasury bond fell about $7.50 per $1,000 in face amount, and its yield rose to 7.70%, compared to 7.63% late Friday.
Among the blue chips, American Express dropped 1 1/8 to 54, International Business Machines fell 1 to 134; Sears, Roebuck fell 7/8 to 39 1/2 and American Telephone & Telegraph fell to 22 5/8.
Hewlett-Packard lost 3/4 to 37 1/8 on top of a 7 1/2-point drop last week, when it said the first shipments of its Spectrum minicomputer would be delayed six months by software problems.
Federal Express jumped 8 to 63 3/4. The company announced plans to discontinue its ZapMail service and to drop a venture into the sale and rental of facsimile equipment.
Allied Stores, which received a sweetened takeover offer from Campeau Corp. of Toronto, led the active list and climbed 2 3/4 to 63 3/4.