Dow Falls 11.27 but Ends Year Up 42.88 Points Despite Crash
Wall Street stocks drifted lower Thursday to end a tumultuous year close to where they stood at the beginning of 1987.
The dollar’s fall to record lows and concerns that the U.S. currency may be in trouble for months to come disheartened stock market investors, but brokers said the full reaction will probably not be felt until Monday.
The Dow Jones average of 30 industrials slipped 11.27 to 1,938.83, finishing 1987 with a net gain of 42.88 points, or 2.26%.
Some other, broader market measures came in below the levels at which they ended 1986.
An unofficial tally showed declining issues for 1987 outpacing advancing issues on the New York Stock Exchange by about 2 to 1. Utilities and financial service issues suffered the biggest losses.
When the closing bell rang on Thursday, advancing shares narrowly outnumbered declines 806 to 746 on the New York Stock Exchange.
Big Board volume totaled 170.14 million shares, against 149.28 million in the previous session.
As the business day began in New York, traders were confronted with the news of a drop in the dollar to new lows in currency markets around the world.
Many investors sold shares at the last minute to use the loss for tax purposes, and other sales were by money managers readying their portfolios for year-end reports to clients.
Such selling was offset earlier in the month by bargain-hunting traders hoping to profit from a market rally in January.
Inexpensive Issues Active
Lately, however, many analysts have questioned the chances for a rebound of any substantial size in the next few weeks.
After the early selling, prices staged a weak recovery, with many smaller issues attracting better support than the blue chips in the Dow.
“Besides selling just for tax purposes, there are bargain hunters here in stocks that were beaten down,” said Eldon Grimm of Birr Wilson Securities. He noted that several of the most actively traded issues were priced under $10.
The market reacted little to news that orders for manufactured goods rose a tepid 0.1% in November, slightly under economists’ expectations.
Much of the day’s activity was concentrated in high-yielding utility issues with quarterly dividend dates impending.
Public Service of Colorado, down 1/8 at 20 3/8; Southwestern Bell, up 5/8 at 34 3/8; Central Maine Power, down at 15 1/2; Oklahoma Gas & Electric, unchanged at 29; Delmarva Power & Light, up 3/8 at 18; and Boston Edison, down at 18 3/4, ranked as the six most active NYSE issues.
Losers among the blue chips included DuPont, down 1 at 87 3/8; Eastman Kodak, down 1 at 49; Ford Motor, down 1 1/8 at 75 3/8; International Business Machines, down 1 1/2 at 115 1/2, and International Paper, down 3/8 at 42.
In the technology sector, which was strong on Wednesday, Digital Equipment dropped back 2 3/8 to 135; Hewlett-Packard fell 1/2 to 58; Honeywell retreated 1 3/4 to 53 7/8, and National Semiconductor dipped to 12.
Oil Issues Lower
Morton Thiokol, which fell 1 1/2 on Wednesday, recouped 1/2 to 39 3/4 as disappointment about the delayed 1988 space shuttle launch abated, traders said.
USX fell to 29 3/4. Traders said some industry analysts predicted that falling oil prices could force the steel and energy concern to take an $80-million charge against fourth-quarter earnings.
Oil issues finished lower. Atlantic Richfield fell 1 1/2 to 69, Exxon 3/4 to 38 1/8, Chevron to 39 5/8 and Occidental 1/8 to 24 3/8. However, Phillips Petroleum, the subject of renewed takeover speculation, gained to 14 and Mobil added 1/8 to 39 1/8.
The Wilshire index of 5,000 equities closed at 2,417.123, down 3.051 or 0.13% from the preceding trading day.
The NYSE’s composite index of all its listed common stocks dipped 0.29 to 138.23.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 206.98 million shares.
Standard & Poor’s index of 400 industrials dropped 1.20 to 285.86, and S&P;’s 500-stock composite index was down 0.78 at 247.08.
The NASDAQ composite index for the over-the-counter market rose 0.77 to 330.47. At the American Stock Exchange, the market-value index closed at 260.35, up 3.0.
In London, share prices tumbled in light trading as a new decline in the dollar haunted the stock market’s final session of the year.
The Financial Times-Stock Exchange 100-share index fell 47.1 points to close near the session low at 1,712.7.
The index finished the year up 2% from the Dec. 31, 1986, close of 1,679.0 and up 9.4% from the post-October crash low closing level of 1,565.2 on Nov. 9.
But it was 29.9% below the year’s high close of 2,443.4 on July 16.
