Negative News Stymies Markets : Durable Goods Report Surprises Traders; Dow Sheds 9.56
Stock prices settled lower Thursday in selling ascribed partly to some unexpectedly negative economic news.
The Dow Jones average of 30 industrials, which had risen 9.70 during the two previous sessions, dropped 9.56 to 2,216.68.
Volume on the New York Stock Exchange tailed off to 165.80 million shares from 184.14 million Wednesday.
Before the opening, the Commerce Department reported a 7.5% drop in new orders for durable goods last month. Excluding military items, orders were down 9.9%.
The figures caught many Wall Streeters by surprise and came as a setback to hopes for a pickup in economic growth.
Tower Report a Factor
Much of the stock market’s impressive rise so far this year has been attributed to expectations that business conditions and corporate profits would improve at a quickening pace in the months ahead.
Wall Streeters said a single report for one month didn’t necessarily wipe out the case for that view, but it did raise some new doubts about its validity.
Analysts said stock traders were also uneasy about how the market would respond to the Tower Commission’s report on the Iran- contras arms imbroglio, which was made public Thursday morning.
President Reagan said he would address the nation next week with a response to the report.
American Express, a component of the Dow Jones industrial average, jumped 4 1/8 to 72 3/4 on speculation that the company might be considering a spinoff of its Shearson Lehman Bros. subsidiary.
Middle South Utilities led the active list, down 3/4 at 14 5/8, on turnover of more than 3 million shares. On Wednesday the Mississippi Supreme Court ruled that the state’s residents shouldn’t have to help pay for a nuclear power plant built by the company.
Pharmaceutical issues, one of the market’s hottest groups lately, turned mixed amid some profit taking. Eli Lilly gained 1 to 95, but Squibb slipped to 155. Pfizer lost 1/2 to 73, and Smithkline Beckman was down 1 1/8 at 106 1/8.
