Dow Off 14 as Traders Await Deficit Data : Only Takeover Targets Make Strong Gains
Stock prices turned in a weak performance on Monday amid growing uncertainty about what the future holds for the U.S. economy.
The Dow Jones index of 30 industrials, which fell 13.09 on Friday, was off another 14.76 to 1,895.72.
Declining issues outnumbered advances by 5 to 3 on the New York Stock Exchange on volume of 168.85 million shares, up slightly from 161.31 million on Friday.
Traders said investors are hoping that this week’s economic data, including the closely watched U.S. trade figures for December, will clear up what is becoming a murky picture. Until then, investors may stay out of the market as they reassess the economy’s outlook.
There are hopes that the data will reinforce optimism engendered by news of a sharp decline in the November trade deficit, which was reported last month. But brokers say it is also likely to come as a significant disappointment to bond and stock market participants if the December figures show the deficit widening again.
“If you ask two economists at the same firm whether or not we’re in a recession, you’d probably get two different answers,” said Ernie Rudnet of Mabon, Nugent & Co.
Reflects Uncertainty
Prices of long-term Treasury bonds dropped about $7.50 for each $1,000 in face value Monday, raising their yields to about 8.36%.
Analysts said that reflected some uncertainty over prospects for any impending move by the Federal Reserve to loosen its credit policy.
In the generally sluggish market environment, activity in takeover stocks remained brisk.
J. P. Stevens jumped 12 to 45 5/8. The company said it received a buyout offer from a group led by its top management.
American Standard added 3 to 66 7/8. Black & Decker raised its offer for the company to $65 a share from $56, and traders were speculating that a still-higher bid might be in the offing.
Musicland climbed 3 1/2 to 32 1/2. Primerica, which holds an 81% stake in Musicland, agreed to a $36-a-share buyout by a group including Musicland executives. Primerica slipped 1/2 to 27 7/8.
Federated Department Stores rose 2 1/2 to 59 1/8. It said it is considering a number of possible responses to a takeover bid by Campeau Corp. of Toronto.
IMS International, traded in the over-the-counter market, gained 6 3/4 to 37 3/8 while Dun & Bradstreet fell 3 3/8 to 49 5/8. D&B; has agreed to acquire IMS International, a New York-based market research firm, through an exchange of stock.
Blue Chip Losers
Losers among the blue chips included General Motors, down 1 7/8 at 61; International Business Machines, down at 107 3/4; General Electric, down at 42, and American Telephone & Telegraph, down at 28 1/2.
The Wilshire index of 5,000 equities closed at 2,463.044, down 15.530.
The NYSE’s composite index of all its listed common stocks dropped 1.01 to 140.34.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 188.57 million shares.
Standard & Poor’s index of 400 industrials fell 2.02 to 284.45, and S&P;’s 500-stock composite index was down 1.86 at 249.10.
Losses Around the World
The NASDAQ composite index for the over-the-counter market lost 1.23 to 344.52. At the American Stock Exchange, the market-value index closed at 267.80, down 2.31.
Stock prices around the world were generally lower, with London and Tokyo coming under pressure. London stock prices were particularly hard hit by worries about labor unrest and prospects of higher interest rates.
On the London Stock Exchange, the Financial Times 100-share index closed down 43.3 points at 1,694.5. The index fell by 50.3 points soon after 2:30 p.m. local time when Wall Street trading opened weaker.
On the Tokyo Stock Exchange, the Nikkei 225-share index closed at 23,771.60 points, down 19.59 points.
