Stock Prices Mixed; Dow Slips 3.65 : Analysts Cite Investor Jitters Over Outlook for Profits
The stock market showed some scattered losses in a quiet session Friday, beset by continuing worries about the outlook for corporate earnings.
The Dow Jones average of 30 industrials dropped 3.65 to 1,793.17, trimming its gain for the week to 18.99 points.
Volume on the New York Stock Exchange slowed to 105.05 million shares from 153.39 million Thursday.
Analysts said recent weakness in International Business Machines and General Motors shares, prompted by concerns about those companies’ impending third-quarter earnings reports, had put a damper on investors’ enthusiasm.
IBM stock, down more than 11 points in the last three sessions, recovered 1 5/8 to 123 5/8 in active trading Friday. GM rose 1/2 to 67 1/8.
Before the market opened, the government reported that the producer price index of finished goods posted a 0.4% increase in September.
Many investors are expected to take a three-day weekend. The markets will be open on Monday, but both Columbus Day and Yom Kippur will be observed then.
Allied Stores led the active list, up at 67. Campeau Corp. said it would proceed with a $66-a-share bid for Allied despite the company’s agreement to be acquired by a separate group of investors at $67 a share.
BankAmerica gained 5/8 to 14 7/8. The company said its chairman and chief executive, Samuel H. Armacost, would resign.
E. F. Hutton Group, which has been the subject of renewed takeover rumors and speculation during the past couple of days, climbed 1 3/4 to 47.
Lear Siegler gained 2 3/4 to 63. The company said it knew of no reason for the activity.
On the downside, Sea Containers Ltd. tumbled 2 to 15 after the company said it would suspend its common stock dividend.
Energy stocks declined. Amoco lost 1 to 66 7/8, Exxon 5/8 to 66 3/8, Chevron 1 1/8 to 43 3/4 and Mobil 5/8 to 38.
Large blocks of 10,000 or more shares traded on the NYSE totaled 2,116, compared to 3,004.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 127.57 million shares.
Bond prices sagged again in thin trading amid new worries about resurgent inflation.
As an example, the bellwether 30-year U.S. Treasury bond lost nearly $7 for each $1,000 in face amount, while its yield rose to 7.68% from 7.62% late Thursday.
“The general view is that the best news on inflation is behind us,” said David Jones, an economist at Aubrey G. Lanston & Co. “With a continuing decline of the dollar, imports will become more expensive, indicating higher inflation to come.”
In the secondary market for Treasury bonds, prices of short-term governments fell 3/32 point, intermediate maturities fell 3/16 point and long-term issues were down 23/32 point, according to the investment firm of Salomon Bros. The movement of a point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.
In corporate trading, industrials fell 3/8 point and utilities fell 1/8 point in light trading.
Among tax-exempt municipal bonds, general obligations and revenue bonds were unchanged. Trading was light.
Yields on three-month Treasury bills were up 2 basis points to 5.07%. A basis point is one-hundredth of a percentage point. Six-month bills rose 7 basis points to 5.13%, and one-year bills were up 3 basis points at 5.29%.
The federal funds rate, the interest on overnight loans between banks, traded at 5.5625%, down from 5.75% late Thursday.
