Stock Prices Mixed; Markets Waiting for Updated GNP Report

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From Times Wire Services

Wall Street turned in a cautious, mixed performance on Wednesday while the dollar rose, reflecting a belief that recent increases in U.S. interest rates are making the currency a more attractive investment.

At the bell, the Dow Jones index of 30 industrials stood at 1,961.37, down 1.16 points.

Advancing stocks outnumbered declines by about 4 to 3 in nationwide trading of New York Stock Exchange-listed stocks, with 809 issues up, 633 down and 518 unchanged.

Trading in all markets was hesitant ahead of today’s updated report on U.S. first-quarter gross national product.


Volume on the floor of the NYSE came to 138.31 million shares, down from 139.93 million in the previous session. Nationwide, consolidated volume in NYSE-listed issues, including trading at regional exchanges and on the over-the-counter market, totaled 162.10 million shares.

Even though the Dow Jones industrial index picked up 21.05 points on Tuesday, analysts said at the start of Wednesday’s session that, until volume picked up, there would be little reason to expect a lasting upward move.

Overheating Signals

“The market is in a gridlock, supported by strong earnings on the bottom and fear of high interest rates on the top,” observed Robert H. Stovall, president of the Stovall Twenty-First Advisers Inc. securities firm.

High interest rates hurt Wall Street by cutting into the corporate profits that support stock prices, and by causing investors to take money from stocks and put it into high-yielding debt instruments.

Higher U.S. interest rates also attract investors to dollar-denominated securities. “Tell me the country with the highest interest rates, and I’ll tell you what is the strongest currency,” one currency trader said.

The GNP update will be closely watched for signs that the economy is overheating. Any step up in inflation would push the Federal Reserve toward tightening credit and this prospect has made Wall Street nervous in recent weeks.


Federal Reserve Board governor Robert Heller and Chairman of the Council of Economic Advisers Beryl Sprinkel both tried to calm the inflation fears on Wednesday.

“Both the Administration and the Federal Reserve remain committed to preventing a resurgence of inflation,” Sprinkel said, while Heller said that he did not expect inflation to break out of its four-year range of around 4% per year.

The anti-inflation talk was also responsible for gold’s fall, traders said. Gold came in for a wave of global selling, starting in Asia when Australia--the world’s fifth-biggest gold producer--announced that it would start taxing gold miners in 1991 for the first time in over 60 years.

Many financial institutions advanced Wednesday on expectations that higher interest rates will expand their profitability, said Eugene Peroni, director of technical research, Janney Montgomery Scott Inc. in Philadelphia.

Most-Active List

Citicorp closed up at 22 3/4 and Federal National Mortgage Assn. was up 1 1/8 at 38 1/8. Also advancing were American Express, up at 24; Bank America, up 1/8 to 10; J. P. Morgan, up 7/8 to 35 1/2, and Chemical Bank, up 5/8 to 27 3/4.

Another reason for the gains, however, may have been that traders were feeling that the stocks were selling too cheaply, Stovall said.


Also leading the market were stocks that were related to real, rumored or potential takeover activity.

West Point-Pepperell closed up 4 at 35 3/8. The company said Farley had filed for federal clearance to acquire between 15% and 25% of its common shares.

Tenneco leaped 4 3/8 to 45 3/4 after saying it wants to sell its oil and gas businesses.

Upjohn was third on the NYSE’s most-active list, up 2 1/8 to 31, while Rorer Group, another drug company, was up 3 at 31 3/4.

“There were rumors that Du Pont is looking for a pharmaceutical company, and that pushed them higher,” Peroni said.

Utah Power & Light led the list of most actively traded issues, closing 3/8 higher at 31, with 4.1 million shares traded. Big traders, mainly Japanese, bought the stock to capture its dividend and then quickly selling it back.

The NYSE index was up 0.24 at 143.77.

Standard & Poor’s index of 400 industrials rose 0.08 to 293.57, and S&P;’s 500-stock composite index was up 0.25 at 253.76.


At the American Stock Exchange, the market value index rose 0.06 to 290.58. The NAS-DAQ composite index for the over-the-counter market closed at 365.73, up 0.57.

Large blocks of 10,000 or more shares traded on the NYSE totaled 3,098, compared to 2,488.

The Wilshire index of 5,000 equities closed at 2,531.976, up 3.830 or 0.15% from the preceding trading day.

In Tokyo, the Nikkei stock average closed at 27,443.65 points, up 130.99 points, on the Tokyo Stock Exchange.

Prices on the London stock exchange closed higher, although they slipped from their morning peaks.

The Financial Times-Stock Exchange 100-stock index was up 5 points, or 0.3%, at 1,789.9 at the close. The index rose as much as 13.8 points in the morning.

Volume was 528.8 million shares, compared to Tuesday’s 459.6 million.