Stocks Retreat on Broad Front; Dow Off 10.22 : Pace Slows on Fears of ‘Triple-Witching Hour’
Stock prices sagged Monday in the slowest trading in 2 1/2 months as traders looked ahead to the “triple-witching hour” at the end of the week.
The Dow Jones average of 30 industrials dropped 10.22 to 2,248.44, bringing its loss over the past four sessions to 31.65 points.
Volume on the New York Stock Exchange totaled 134.93 million shares, down from 150.87 million on Friday and the smallest total since a 91.88-million-share day on Jan. 2.
This Friday marks the last trading in a set of options and futures on stock indexes, which are used by professionals in multiple computer-program strategies.
In the past, witching-hour sessions have frequently produced volatile and heavy activity as program traders close out their positions. These quarterly occasions have established no reliable pattern. Some Wall Streeters argue that the approaching one won’t be especially stormy.
Early Selling
Most of the day’s selling came early in the session, with analysts noting selling by New Jersey as part of a divestiture program involving stocks of companies doing business in South Africa.
Through the afternoon, the market drifted and then made up a little of its lost ground near the close.
Among the blue chips, Coca-Cola lost 1 to 46 1/8, General Motors fell 7/8 to 77, Alcoa dropped 1 1/8 to 42 5/8, Sears, Roebuck lost 1 to 51 1/2 and American Telephone & Telegraph dipped 1/8 to 23.
Owens-Corning Fiberglas tumbled 3 1/8 to 26 for one of the day’s largest percentage declines among Big Board issues. The firm attributed the drop to a New York Times article published Sunday on studies of the health effects of glass fiber.
Certainteed, another producer of glass fiber items, fell 2 3/8 to 36 1/8.
Upjohn dropped 4 3/4 to 134 as a Food and Drug Administration advisory panel recommended that the FDA approve Upjohn’s minoxidil drug for use against baldness.
In the credit market, bond prices declined in mostly light trading, as the market failed to throw off its recent torpor and was unmoved by economic developments.
The Treasury’s closely watched 30-year issue fell 5/16 point, or about $3.15 per $1,000 in face value. That boosted its yield to 7.52% from 7.49% late Friday. Corporate and municipal bonds were unchanged to lower.
Bond Prices Dip
In the secondary market for Treasury bonds, prices of short-term government issues eased 1/32 to 1/16 point, intermediate maturities lost 1/16 to 5/32 point and 20-year issues fell 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 $1,000 bond.
The federal funds rate, the interest on overnight loans between banks, was quoted late in the day at 6.188%, up slightly from 6.125% late Friday.
