Stocks Mostly Lower but Dow Gains Fraction : Dollar’s Decline, Jitters About Market Blamed
A fresh decline in the dollar and lingering anxiety about the stock market’s own strength pushed stock prices mostly lower Monday, but the market avoided the sharp falls of the preceding two sessions.
The Dow Jones industrial average finished 0.82 points higher at 1,979.77 after recovering from a 19-point deficit earlier in the session.
But the broader market moved downward. Declining issues outpaced advances by more than 2 to 1 on the New York Stock Exchange, with 1,059 issues falling, 468 gaining and 420 unchanged.
Volume on the Big Board totaled 142.82 million shares, down from 163.17 million on Friday.
“The saga of the dollar was the saga of the stock market,” said Michael Metz, a market analyst with Oppenheimer & Co. “The dollar was hit badly and that caused weakness in the bond market and the fear that the Fed (Federal Reserve) may be forced to tighten monetary policy,” he said.
Higher interest rates could dampen corporate growth and, more immediately, dry up much of the lively takeover activity that has fueled the market’s recent advances.
“It is treacherous footing in this market right now,” said Alan Ackerman of Gruntal & Co. The market last week, its worst so far this year, lost 108 points, or 5.2% of its value.
Investors were predisposed to sell stocks Monday after last week’s performance. “The suddenness and amplitude of the dollar’s decline was a surprise,” Metz added.
“The problem is that one minute people are euphoric about the economy and the next they are in despair. They haven’t found a common ground,” Metz said.
Many investors had their new-found confidence shaken late last week when stocks fell sharply on Thursday and Friday. The closely watched Dow index tumbled about 45 points on Friday after falling nearly 44 points in the previous session--sparking widespread fears that Monday’s session could turn into another “Black Monday” akin to the collapse on Oct. 19.
“We’ve been almost rudely reminded that the market is still on very, very thin ice,” said Hugh Johnson, a senior vice president of First Albany Corp. in Albany, N.Y. “It’s still volatile and vulnerable.”
But Monday’s decline was tempered by some bargain hunting at the lower price levels, traders said. They noted, though, that many foreign investors and financial institutions remained on the sidelines.
Among the most actively traded issues on the NYSE, Bankers Trust was down at 31 3/4, AT&T; fell 3/8 to 26 3/4, Gillette dropped 1 5/8 to 45 1/8, Navistar lost at 6 3/8 and American Express was unchanged at 24 1/2.
