Dow Down 0.18 After a Session of Big Swings
The stock market ended almost unchanged Friday, deriving only a brief benefit from a series of government reports that showed a decline in the U.S. economy’s growth rate, a factor that should ease inflation fears.
The Dow Jones index of 30 industrials, up about 14 points in early trading and down about 11 at its afternoon low, closed with a 0.18 loss at 2,133.18.
For the week the index was down 17.07 points.
Advancing issues outnumbered declines by about 8 to 7 in the daily tally of nationwide trading in New York Stock Exchange-listed stocks, with Big Board volume rising to 160.24 million shares, up from 154.53 million in the previous session.
“The market’s been like a yo-yo,” said Paul Campbell, Nikko Securities investment strategist. “After the 42-point rise (last) Friday, we’ve seen the typical big swings.”
Advance Eroded
The market had several government reports to review. Producer prices rose 0.4% after a 0.6% increase in August, retail sales fell unexpectedly by 0.4% and industrial production was unchanged, the reports showed.
Taken together, the statistics suggested that the interest rate increases engineered earlier in the year by the Federal Reserve were achieving their intended effect of taking some steam out of the economy in order to stifle inflationary pressures, economists said.
Early reaction to the reports was positive, allowing the Dow index to rise, but a bout of futures-related selling in early afternoon eroded the advance.
The decisive factor in the next few sessions will be the dollar, Campbell said. “Regardless of what happens, if the dollar goes down, the concern is that interest rates will rise.”
The dollar’s performance has been dismal this week, with the currency falling 4.4% against the Japanese yen. It has lost about 5 pfennigs in three days, falling to 1.8055 West German marks.
Tokyo share prices closed slightly higher in dull trading Friday as investors squared positions ahead of the weekend. The Nikkei 225-share index rose 33.27 to close at 27,306.57. It lost 136.07 points on Thursday.
Share prices finished higher on the London Stock Exchange, helped by a strong start on Wall Street and some new purchases at the start of the new two-week trading account. A late buying surge in the oil sector also gave the overall market a boost, dealers said. The Financial Times 100-share index closed at 1,840.6 up 9.9 points from Thursday’s close.
