Market Indecisive in Slow Session
Stock prices seesawed Wednesday and finished mixed in a slow session that reflected investor apathy and more uncertainty about where the market is headed.
“Basically, there really isn’t any excuse for a rally,” said Jonathan Groveman, head of equity trading at the New York investment firm Ladenburg, Thalmann & Co. “There’s just not a heck of a lot going on.”
The Dow Jones index of 30 industrial stocks, which partly recovered Tuesday from a three-month low, swung in a narrow range and closed up 4.45 points to 2,025.96. Most broader market indicators were little changed.
Although many Wall Street professionals weren’t surprised at the market’s indecisive behavior, others hoping for further gains expressed dismay and resignation.
“There’s still that fear factor,” said Peter Karos, managing director and head of arbitrage and over-the-counter trading at the Minneapolis investment firm Piper Jaffray & Hopwood Inc. “The lack of investor interest could last three years or until next month. Nobody knows, including me.”
Volume on the New York Stock Exchange floor totaled 169.50 million shares, compared to 162.79 million Tuesday. But discounting institutional trading in stocks with high-yielding dividends, it was one of the slowest sessions of the summer.
Many brokers attributed the sluggishness in stocks to the growing attractiveness of bonds and money market funds as alternative investments, since they offer relatively high return with little risk.
Computer Issues Lose
“The stock market is going to be anemic unless there’s a big fundamental change in the rates available in the money markets,” Groveman said. “There’s just too much competition out there for stocks to do better.”
Losing issues outnumbered advances by less than 7 to 6 in composite trading of NYSE-listed stocks, with 742 down, 660 up and 533 unchanged.
The most-active Big Board issue was Philadelphia Electric, which carries a 12% dividend yield but had to be purchased by today to qualify for it. The stock closed up to 18 1/2 on volume of nearly 41 million shares.
Computer stocks were prominent Big Board losers, notably Prime, which fell 1 3/4 to 12 1/8. The company said third-quarter earnings would fall well below Wall Street expectations.
McGraw Hill jumped 3 to 68 5/8 on a rumor that the investment firm Coniston Partners had acquired a 5% stake in the company, subject of persistent takeover speculation.
In the over-the-counter market, Farmers Group jumped 4 to 67 1/2. Late Tuesday, the insurance company agreed to talk with suitor Batus.
Nationwide, consolidated volume in NYSE-listed issues, including trading at regional exchanges and on the over-the-counter market, totaled 191.70 million shares.
The NYSE composite index of all listed issues rose 0.15 to 147.64.
The Wilshire index of 5,000 equities closed at 2,602.155, up 2.490.
Standard & Poor’s industrial index rose 0.16 to 299.47, and S&P;’s 500-stock composite index rose 0.21 to 260.77.
Prices on the Tokyo Stock Exchange rallied sharply Wednesday. The Nikkei average of 225 selected issues, which dipped 4.74 points Tuesday, rose 282.31 to close at 28,178.86.
In London, the Financial Times 100-stock index, which gained 8.5 points Tuesday, closed up 5.6 to 1,830.9.
