Stock prices closed with narrow losses Thursday in a day dominated by edginess over the release today of the November trade deficit figure.
The Dow Jones industrial index of 30 stocks slipped 8.62 points to 1,916.11. But gaining issues outweighed declining issues by a slight margin on the New York Stock Exchange.
Big Board volume slipped for the third straight day, dropping to 141 million shares from 154 million on Wednesday and 165 million on Tuesday.
Concern about the key trade figure, which rightly or wrongly has become the financial markets' most important measurement of the nation's economic health, put the market in a virtual catatonic state for most of the day.
"Without the volume and the liquidity, buyers are real hesitant to get into the market. So we are playing to a limited audience," said trader Donald Crooks of Morgan Stanley & Co.
Until late afternoon, when it slipped by 20 points, the Dow index flitted back and forth on either side of the unchanged level within a very narrow trading range.
"It's anyone's guess what is going to happen when this trade deficit is released, and right now investors have a bad case of the jitters," said veteran stock analyst Alan Ackerman of Gruntal & Co.
Caused Earlier Drop
Analysts said the betting is that the deficit figure will fall within the $14.5-billion to $15.5-billion range, but traders and analysts said a lot of investors have reduced their stock positions in case of a surprise figure.
Rumors last Friday that the November deficit could balloon to as much as $20 billion--up from the record $17.6 billion reported in October--were blamed at least partially for a 140-point selloff, the third worst one-day drop the market has ever endured.
After a week of volatility from massive amounts of arbitrage-related program trading, investors found little solace from the NYSE's afternoon request that program-trading be curtailed for a six-day period beginning today if the market makes a large swing in either direction.
Results of the program will be studied for possible action toward easing the big price jumps and drops in the market, the exchange said.
A report by the presidential Brady Commission on the October stock market crash found that the sophisticated trading schemes played a key role in the Dow's record 508-point plunge Oct. 19.
In the past week, one of the few things that has been consistent on Wall Street has been the volatility. "The volatility did not dry up even when the volume dried up," said Crooks of Morgan Stanley.
Among active issues, Federated Department Stores rose 2 1/2 to 36 5/8 after it said that real estate developer Donald Trump might buy 15% or more of the retailer's stock.
Stop & Shop, another retailer, jumped 1 3/8 to 21 1/2. The perennial takeover candidate said a partnership led by Dart Group Chairman Herbert Haft plans to buy more than $15 million of Stop & Shop's stock.
Monsanto gained 1 1/8 to 79. The company is expected to disclose within two weeks a major technological breakthrough which would expand sales of its artificial sweetener, analysts and traders said.
Drug company Merck & Co. fell 2 5/8 to 151 after Merrill Lynch & Co. downgraded the stock and recommended that investors switch into Upjohn and Marion Labs.
Upjohn rose 1 point to 32 while Marion eased by to 24 1/2.
Centerior Energy topped the NYSE most active list, generating almost 23 million of the total 140 million shares traded Thursday, as investors strove to make profits in what analysts said was dividend-related trading. Its stock lost 1/8 to 16 3/8.
Digital Drops Further
Computer maker Digital Equipment Corp. fell 3 3/8 to 119 3/8, losing ground for the third straight day despite reporting a 22% rise in second-quarter earnings.
Large blocks of 10,000 or more shares traded on the NYSE totaled 2,330, compared to 2,676.
The Wilshire index of 5,000 equities closed at 2,415.469, up 1.090.
The NASDAQ over-the-counter index rose 1.55 to 334.23.
The American Stock Exchange market-value index climbed 0.61 to 263.88.
The Standard & Poors' 500 stock index rose 0.21 to 237.20, while the NYSE composite index climbed 0.02 to 137.97.
On the Tokyo Stock Exchange, the Nikkei index of 225 selected issues, which lost 300.06 points Wednesday, gained 278.66 to close at 22,603.65. Prices rose on buying by trust funds and other institutions of electrical and paper and pulp shares, traders said.
Traders said those institutions, encouraged by the dollar's rebound, seemed to be betting that the U.S. trade figures might show a greater improvement than expected.
Prices also were boosted by comments Thursday by Satoshi Sumita, governor of the Bank of Japan, indicating that the bank will tolerate a seasonal fall in short-term interest rates expected at the outset of the year, traders said.
In London, share prices closed firmer but off the day's high in quiet trading. The Financial Times Stock Exchange 100-share index rose 10 points to close at 1,743.4. The index had been up 19 points early in the trading session.