Unmoved by Economic Data : Dow Dips 0.89; Stocks Remain in Doldrums
The stock market finished about where it started Tuesday after a listless session distinguished chiefly by one of the lowest trading volumes of the year.
The first of some widely anticipated economic reports scheduled for release this week failed to inspire either buying or selling pressure.
The Dow Jones index of 30 industrials, which fell 25.78 points on Monday to reach its lowest level in nearly three months, gave up another 0.89 to close at 1,989.33. That was its lowest close since it ended at 1,956.44 on May 27.
Declining issues outnumbered gainers by about 8 to 5 in nationwide trading of New York Stock Exchange-listed stocks, with 552 issues up, 811 down and 580 unchanged. The NYSE composite index finished unchanged at 145.94.
Volume on the floor of the NYSE came to 119.54 million shares, down from 122.25 million in the previous session and the lowest since 113.4 million shares were traded on Aug. 5. There have only been two other days this year when trading volume was lower than it was Tuesday--May 23, when it was 102.64 million shares, and June 20, when it was 116.75 million.
“Everyone is at the beach,” said Tom Fogarty, director of institutional equity sales at Nomura Securities International Inc. “There is no momentum on the upside or on the downside.”
Data Anticipated
Nationwide, consolidated volume in NYSE-listed issues, including trading at regional exchanges and on the over-the-counter market, totaled 141.58 million shares on Tuesday.
Market analysts said new economic reports showing a 0.4% rise in consumer prices in July and a 7% decline in durable goods orders had been largely anticipated, and failed to provide much direction.
The reports sparked a mild rally in the bond market, where traders have been vigilant for signs of accelerating inflation coupled with economic vigor.
The price of the closely watched 30-year Treasury bond was up about $7.50 for every $1,000 in face value, as its yield fell to 9.37% from 9.45% late Monday.
Blue chip stock prices drifted higher for much of the morning, while the rest of the market was mixed. But by mid-afternoon, even the blue chips gave up their gains.
Thomas Czech, chairman of the investment committee at the brokerage Blunt Ellis & Loewi in Milwaukee, said that in failing to follow the bond market higher, the stock market demonstrated that it “is nervous over too much growth and has been surprised for several months now as to how strong things are.”
Dean A. Gulis, director of research for the brokerage Roney & Co. in Detroit, said the low volume indicates “there is apathy and fear on the part of investors generally.”
Blue Chips Mixed
Wickes was the second most-actively traded issue on the NYSE, slipping 1/8 to 13 1/8. A management group has proposed buying the company for $12 a share.
Among other actively traded issues on the NYSE, Coca Cola rose 5/8 to 39 1/8; General Electric was unchanged at 39 1/8, and International Business Machines rose 1/8 to 110 7/8.
Clorox rose 2 1/8 to 31 5/8 on speculation that a West German company that already owns a stake in Clorox may be buying more.
In over-the-counter trading, Farmers Group climbed 2 1/2 to 69 3/4 on speculation that it may drop its resistance to BAT Industries, which has proposed a buyout at $72 a share.
Tokyo prices bounced off their worst levels late in Tuesday’s trading, but closed lower. The Nikkei index of 225 selected issues, which fell 130.24 points Monday, dropped another 159.23 to close at 27,919.95.
In London, the Financial Times 100-stock index, which fell 12 points Monday, dropped 14.4 to close at 1,817.9.
Volume amounted to 319 million shares, compared to a spare 231 million shares traded on Monday, the lowest volume for the year.
