Market’s Early Rally Fizzles; Dow Slips 6.58
The stock market posted scattered losses in another sluggish session Wednesday after an early advance failed to stand up.
The Dow Jones index of 30 industrials, up more than 10 points soon after the opening, fell 6.58 to 2,031.65.
Declining issues slightly outnumbered advances in nationwide trading of New York Stock Exchange-listed stocks.
Big Board volume totaled 130.48 million shares, against Tuesday’s 108.72 million.
Stocks headed higher at the opening as the dollar climbed in foreign exchange on reports suggesting that Japanese officials planned no immediate move to increase interest rates.
That, in turn, prompted slightly higher prices, and hence lower interest rates, for U.S. government securities in the credit markets.
“It was a sideways move,” said Larry Wachtel of Prudential-Bache Securities. Wall Street this week has been mired in a slow period at the end of the summer and before the Labor Day holiday. The market will be closed Monday.
Investors were also marking time before the August employment report, the first indication of how the economy performed in the month. It will be watched closely for signs of overheating, after the Federal Reserve’s discount rate hike Aug. 9 aimed at braking inflation.
Analysts said there was no strong move to sell stocks, with technicians encouraged by the market’s performance since it held the 2,000 mark last week at the three-month lows and halted a three-week slide.
“The market is giving encouraging evidence that a bottom is forming here, though I’m not sure about the bond market,” said Oppenheimer & Co. market strategist Michael Metz.
“I’m rather encouraged by the last couple of days,” said Trude Latimer of Josephthal & Co. “Volume dried up on the downside,” she said, while some blue chips held their ground. She believes a “minor upward trend” that has been developing since last week will continue “at least until we get to just short of 2,100 (on the Dow index).” But she said it will take more momentum to punch through that zone.
Gould Inc. led the active list, down to 22 1/2 on volume of more than 9.8 million shares. It jumped 7 1/8 Tuesday as the company agreed to be acquired by Japan’s Nippon Mining for $23.25 a share.
Tech Issues Lower
Takeover rumors and speculation revved up several other issues, including Kerr-McGee, up 3 at 39, and B. F. Goodrich, up 2 3/8 at 54. Arbitragers said they heard that New Zealand financier Sir James Goldsmith and Hanson PLC might make a bid. Goodrich said it does not comment on its stock activity.
Scientific-Atlanta said it knew of no explanation why its shares climbed 1 3/4 to 12 in unusually heavy activity.
Other computer and technology issues, by contrast, were broadly lower. International Business Machines dropped 1 3/8 to 111 1/2; Digital Equipment fell 1 1/2 to 92 7/8, and Hewlett-Packard lost 1 3/8 to 46 1/2.
American depositary shares of leading Japanese companies also came under pressure. Hitachi fell 5 3/8 to 120 3/8; Honda Motor dropped 4 1/8 to 151 3/8; Matsushita slipped 6 to 187 1/2, and Kyocera gave up 1 1/2 to 83 3/8.
Wickes rose to 14 in active trading. The New York Times quoted analysts as saying they believed the company to be worth more than the $12 a share its chief executive has offered to buy it out.
Large blocks of 10,000 or more shares traded on the NYSE totaled 2,573, compared to 2,101 Tuesday.
The Wilshire index of 5,000 equities closed at 2,613.453, down 3.917 from Tuesday.
The NYSE’s composite index of all its listed common stocks dropped 0.37 to 148.29.
Standard & Poor’s industrial index fell 1.27 to 300.05, and S&P;'s 500-stock composite index was down 0.99 at 261.52.
Foreign Indexes Lower
The NASDAQ composite index edged up 0.06 to 376.55; the American Stock Exchange index closed at 294.80, down 0.11.
In foreign trading, stock prices closed lower in Tokyo Wednesday in thin trading, with no fresh factors surfacing to lure hesitant investors into the market, brokers said.
The Nikkei 225-share index sank 145.70, or 0.53%, to close at 27,365.95.
Prices on the London Stock Exchange edged lower after a quiet session as players found little reason to alter their positions.
The Financial Times 100-stock index fell 1.2 to finish at 1753.6.