Dow Slips 7.45 as 3-Day Stock Run-Up Fizzles
Stock prices sagged Thursday as the market ran into resistance from sellers after reaching a two-month high the day before.
The Dow Jones average of 30 industrials, down more than 20 points at its midday low, closed with a 7.45 loss at 1,891.59.
The average had risen 21.23 points in the week’s first three sessions.
Volume on the New York Stock Exchange came to 165.29 million shares, against 183.17 million on Wednesday.
Analysts noted that the market’s recent advance began to bog down Wednesday when the Dow Jones industrial average reached the 1,900 level. Some traders apparently concluded that 1,900 would prove to be a difficult hurdle for the market to clear.
Stocks also got no help from the bond market, where interest rates moved up as traders awaited the completion of the Treasury’s quarterly sale of bonds and notes.
Another drag on the market was International Business Machines shares, which dropped 1 3/4 to 121 3/8 as Goldman, Sachs removed the stock from its recommended list.
Goodyear Declines
Goodyear Tire & Rubber fell 1 to 48 and led the active list on turnover of about 5.5 million shares. The company, which has become a takeover target of an investor group led by Sir James Goldsmith, said it may buy back as many as 20 million of its shares.
General Motors, which reported plans to close 11 assembly and metal fabricating facilities in this country, bucked the market’s downtrend with a 1-point gain to 74.
American Motors, meanwhile, rose 3/8 to 3 5/8 in active trading, and Chrysler dropped 5/8 to 38 7/8. Responding to rumors, AMC said it had held no talks with Chrysler concerning the sale of any of its assets.
CPC International gained 1 7/8 to 79 7/8, bouncing back from a 6 1/2-point decline on Wednesday, when CPC bought a block of its stock that apparently marked the end of moves by an investor group toward a possible takeover.
In the overall tally on the Big Board, declining issues outnumbered advances by about seven to five.
In the credit markets, long-term bond prices sank Thursday after demand at the third and last portion of the U.S. Treasury’s record $29-billion quarterly refunding operation fell short of expectations.
The yields on the 30-year Treasury bonds sold in the latest auction dipped to 7.54%. That was down from 7.63% at the last such auction on Aug. 7 and was the lowest yield since 7.37% at an auction on May 8. A total of $9.26 billion of the bonds were sold out of bids of $21.09 billion.
