Dow Slips 1.49 as Interest Rate Doubts Surface : Good Economic News Helps Takeover Stocks
Takeover news and speculation provided most of the excitement in an otherwise quiet, drifting stock market session Monday.
Analysts said the general market was held back by new doubts about the outlook for interest rates.
The Dow Jones index of 30 industrials slipped 1.49 to 2,056.37.
Advancing issues outnumbered declines by about 8 to 7 on the New York Stock Exchange.
Big Board volume came to 152.58 million shares, down from 201.41 million in the previous session.
Prices declined slightly in the bond market, pushing yields on long-term Treasury bonds up to the neighborhood of 8.5%. Developments late last week raised concern that the drop in interest rates since last fall had about run its course.
Most-Active Issue
Rates rose sharply Friday after the Labor Department reported much stronger growth in employment than expected for February.
If the economy is robust enough to support a big increase in jobs, credit market traders reason, the Federal Reserve is unlikely to take any further steps soon to relax its credit policy.
Given that prospect, investors seemed to be focusing their attention mainly on numerous stocks involved in takeovers and other deals.
Firestone Tire & Rubber led the active list, up 13 1/2 at 63 1/8. Pirelli Group of Italy made a $58-a-share bid to acquire the company, which is planning to sell its tire business to Japan’s Bridgestone Corp.
Roper Corp. climbed 11 to 48 3/8. General Electric made a $45-a-share offer for Roper, which previously agreed to be taken over by Whirlpool Corp. for $37.50 a share.
Mobil gained 1 1/8 to 44 3/4. The company said it had reached a definitive agreement to sell its Montgomery Ward subsidiary to a group led by Ward’s top management.
Lorimar Telepictures, traded on the American Stock Exchange, rose 2 3/8 to 14 7/8. The company said it had been approached by Warner Communications for talks about a possible business combination.
Moore McCormack Resources, which opposed a $31-a-share offer from Southdown, added 5/8 to 36 1/2.
Polaroid’s stock rose 2 1/2 to 36 as 2.2 million shares changed hands.
Several large investors, including Roy E. Disney’s Shamrock Holdings in Burbank and the Bass family of Texas, are rumored to be building a stake in the Cambridge, Mass., camera and film manufacturer. Polaroid had no comment.
Analysts also noted buying of some technology issues. Compaq Computer gained 2 to 54, Cullinet Software rose 7/8 to 6 7/8, Digital Equipment rose 2 3/4 to 124 3/8, National Semiconductor rose 1/2 to 12 1/2 and Ultimate Corp. rose 1 3/8 to 15 1/8.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 180.64 million shares.
Share prices fell on the London Stock Exchange as the British pound rose in foreign exchange markets, making British exports more expensive. At the close, the Financial Times 100-share index was down 16.3 points at 1,818.2.
In Tokyo, stock prices finished mixed after profit taking tempered by buying of blue chip and high-tech shares Monday. The Nikkei 225-share index dropped 10.99 points, to close at 25,616.58.
