Market Lower, but Computer Issues Climb
The stock market posted a small loss in a drifting session Monday, faced with some profit taking after last week’s rise to record highs.
Computer stocks bucked the overall down trend, aided by positive views of International Business Machines’ impending second-quarter earnings report.
The Dow Jones index of 30 industrials slipped 3.02 to 2,452.97.
New York Stock Exchange volume totaled 152.46 million shares, versus 172.13 million Friday.
Analysts said some traders were taking a cautious approach as they awaited the appearance of Rear Adm. John Poindexter at congressional hearings into the Iran- contra affair.
Beyond that, they said, many market participants were concerned that stock prices might be due for a pullback after their rally in late May and June.
A good part of the market’s recent gains has been attributed to expectations of strong second-quarter earnings reports from companies in many industries. Brokers say it could be a problem for the market if those hopes aren’t fulfilled.
Nevertheless, enthusiasm for computer stocks ran high as NCR Corp. posted improved profits for the second quarter and anticipation increased of a better-than-expected showing from IBM as well.
A recommendation by Smith Barney, Harris Upham & Co., anticipating stronger IBM earnings and emphasizing that cyclical economic growth should aid the company over the long term, helped boost IBM 2 7/8 to 169 7/8, a new high. IBM is expected to report earnings today. NCR, which reported higher earnings, gained 1 3/4 to 75 1/8.
Apple Computer, which also chalked up higher quarterly earnings, rose 2 1/2 to 40 1/2 in the over-the-counter market. Digital Equipment rose 4 1/8 to 163 5/8; Unisys gained 2 1/8 to 126 7/8; Honeywell increased 2 3/8 to 82 1/2, and Prime Computer rose 1 to 27.
Energy stocks, by contrast, ran into selling after posting strong gains of late on rising oil prices.
Amoco dropped 1 3/4 to 86 7/8; Exxon fell 3/8 to 93 3/4; Atlantic Richfield declined 1 to 95 3/8; Mobil dropped 5/8 to 51, and Occidental Petroleum fell 3/4 to 37 3/4.
Declining issues outnumbered advances by about 5 to 4 in the overall tally on the NYSE.
In the credit markets, meanwhile, bond prices finished unchanged to lower in quiet, uneventful trading.
The Treasury’s 30-year bond tumbled about 3/4 point, or $7.50 per $1,000 in face value. Its yield jumped to 8.53% from 8.46% late Friday.
Corporate and municipal issues also declined.
In the secondary market for Treasury bonds, prices of short-term government issues finished unchanged to 5/32 point lower, intermediate maturities declined 5/32 point to 5/16 point and 20-year issues fell 1/2 point.
In corporate trading, industrial issues fell 1/2 point and utilities lost point in light activity.
The federal funds rate, the interest on overnight loans between banks, was quoted late in the day at 6.563%, up from 6.438% Friday.
