Dow Slips 5.81; Market Mixed, Volume Light : Investors Reluctant to Buy Stocks, Analysts Say
The stock market closed mixed Monday but managed a comeback from lows tied to worries about U.S. clashes with Iran in the Persian Gulf and a jump in bond yields to the highest level since early January.
The Dow Jones index of 30 industrials slipped 5.81 points to 2,008.12. Gaining and losing issues were about even on the New York Stock Exchange, with 771 up, 765 down and 460 unchanged. The index had hit an early low of 1,993.20.
Big Board volume remained light with 144.65 million shares changing hands, suggesting most of the trading was done between professional brokerages. Many analysts said a broad range of investors remained reluctant to get into stocks. On Friday, 234.16 million shares were traded.
“I don’t see any institutional rush to buy them,” said Robert O’Toole, manager of over-the-counter trading at Shearson Lehman Hutton Inc. “Nobody on the face of this Earth can tell which way this market’s going for the rest of the week.”
“Traders were trading with each other,” said William King, head trader at Nikko Securities Co. International in New York. “Otherwise, it’s really been a sleepy day.”
“Despite the surprise downward pressure of the gulf clash, added to rising interest rates and bond yields, the market gave ground slowly,” said Gruntal & Co.’s Alan Ackerman. “We’ll see backing and filling for the next few days, and then a resumption of the stock market’s earlier upward move” prior to Thursday’s 100-point dive by the Dow index, he said.
Bonds Feel Effect
Bear, Stearns & Co. analyst Lewis Smith said the most notable feature of Monday’s session was that stocks retreated to Thursday’s low and selling dried up.
The impact was first felt in the bond market, where yields on some 30-year issues surpassed the 9% barrier, the highest levels in three months. This made bonds more attractive to many investors and raised the prospect that stocks could suffer sharp declines if bond yields continue to rise.
Utilities led the actives list, with trading on heavy volume fueled by investors attempting to capture dividends. Pacificorp fell 3/8 at 34 1/8 on 15.1 million shares, while Idaho Power rose 3/8 to 23 3/4 with about 2.2 million shares traded.
The Idaho Public Utilities Commission approved the merger of Pacificorp and Utah Power & Light Co. The Idaho commission is the second regulatory commission to approve the merger, following the Wyoming Public Service Commission, which acted in early February.
Speculative takeover-related buying helped boost some stocks. Rumors surfaced that the Haft family of Maryland was preparing an offer for retailing giant F. W. Woolworth & Co., which rose 2 to 55.
Armtek rose 2 to 30 1/8 after Italy’s Pirelli group agreed to buy Armtek’s Armstrong tire unit for $190 million in cash. Facet rose 3 1/2 to 31 3/8 after Pennzoil agreed to buy the company for $32 a share, topping a rival bid from Prospect Group.
Oil stocks were mixed despite a run-up in petroleum prices incited by the Persian Gulf fighting. Amoco rose 7/8 to 78 3/8, Atlantic Richfield fell 7/8 to 87 1/2, Chevron fell 1/2 to 47 5/8 and Kerr McGee rose 1/2 to 37 1/8.
American Telephone & Telegraph fell to 26 3/8. The company said its chairman James E. Olson died after a battle with cancer.
Among other notable blue chips, Merck fell 2 1/8 to 157 3/4, Bethlehem Steel rose 1 to 21, General Electric fell 1/2 to 39 1/2 and Du Pont rose 2 to 84 3/8.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 167.77 million shares.
Large blocks of 10,000 or more shares traded on the NYSE totaled 2,530, compared to Friday’s 4,142.
The Wilshire index of 5,000 equities closed at 2,587.036, down 3.485 from the preceding trading day.
The NYSE index of all listed issues fell 0.23 to 146.77.
Standard & Poor’s index of 400 industrials fell 0.63 to 302.05, and S&P;’s 500-stock composite index fell 0.56 to 259.21.
At the American Stock Exchange, the market value index rose 1.68 to 300.92. The NASDAQ composite index for the over-the-counter market closed at 375.10, up 1.20.
In foreign trading, Japanese share prices closed sharply lower Monday in moderate trade because of worry about whether Wall Street can get back on its feet. The Nikkei 225-share index sank 222.12 points to 26,671.45. It fell 217.78 points on Friday. Shares on the London stock exchange closed slightly firmer but were well off early highs following a lower Wall Street opening.
London’s blue chip Financial Times 100-share index closed up 9.2 points from Friday at 1,787.8.
