Dow Drops 10.93 as Midweek Stock Rally Runs Out of Steam

From Times Wire Services

Wall Street's midweek rally succumbed to a bout of mild profit taking Friday as stock prices closed lower in the lightest trading session since Jan. 2.

The decline was prompted in part by uncertainty over next week's Venice economic summit, traders said.

The Dow Jones average of 30 industrials, up nearly 59 points Wednesday and Thursday, fell 10.93 to 2,326.15. That left the average with a net gain of 34.58 for the week.

Volume on the New York Stock Exchange came to 129.11 million shares, down from 140.30 million Thursday.

The Labor Department reported Friday morning that the civilian unemployment rate held steady at 6.3% last month and that nonfarm payroll employment increased by 123,000.

Signal Not Significant

The gain in non-farm payrolls was smaller than most analysts had expected. However, it reflected some annual revisions in the department's data, and thus was not regarded as a significant signal of any change in the course of the economy.

Texaco and Pennzoil stocks rose amid growing speculation that outsiders may attempt to take over Texaco and then force the oil giant into settling its $10.3-billion legal battle with Pennzoil.

Texaco stock, the third-most active issue on the NYSE, gained 37 1/2 to 38 a share on turnover of 1,959,000 shares in composite trading. Pennzoil stock climbed 1 1/2 to 38 1/8 a share.

Several stocks gained ground on takeover rumors and speculation, including Federated Department Stores, up 2 3/8 at 50 3/8, and Harnischfeger, up 1 1/8 at 19.

Echlin Manufacturing dropped to 15 3/4 in active trading. On Thursday the company estimated lower earnings for the fiscal quarter that ended Sunday.

Selected money-center bank stocks provided one of the few pockets of strength in the market.

Citicorp picked up 1 1/8 to 58; J.P. Morgan gained 1 1/8 to 45 1/2; Chemical New York rose 1 to 44, and Chase Manhattan added 3/8 to 39 3/8. However, Manufacturers Hanover slipped to 43 and BankAmerica was down 1/2 at 10 7/8.

Losers among the blue-chip industrials included International Business Machines, down 1 3/8 at 160; DuPont, down 1 3/8 at 114 5/8; Eastman Kodak, down 1 5/8 at 78 1/8; Exxon, down 1 at 87, and General Motors, down 1/2 at 85 7/8.

Gottschalks dipped 5/8 to 14 3/4 as underwriters announced a public offering of 1 million shares at that price.

Declining issues outnumbered advances by about eight to seven on the NYSE.

Credit markets moved moderately higher in quiet trading.

The Treasury's bellwether 30-year bond was up 7/8 point, or about $8.75 per $1,000 face amount, while its yield, which moves inversely from its price, dipped to 8.64% from 8.73% Thursday.

Corporate and municipal issues also were higher. Yields on Treasury bills were unchanged to lower.

The federal funds rate, the interest on overnight loans between banks, traded at 6.688%, unchanged from Thursday.

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