Weak Dollar Weighs Heavily on Market; Dow Slips 3.55 in Quiet Session
Blue chip stocks closed lower Thursday as lingering weakness in the dollar held the market down in what some analysts said was a dull day on Wall Street with little to stir investors.
The Dow Jones index of 30 industrials declined 3.55 to close at 2,114.69 after drifting in a narrow range.
Volume on the NYSE came to 128.92 million shares, down sharply from Wednesday’s 153.14 million, with advancing issues barely outnumbered decliners in nationwide trading of New York Stock Exchange-listed stocks.
“Nobody had any conviction to do anything, to be aggressive buyers,” said Michael Metz, vice president for Oppenheimer & Co. “Short term, the market is trying to find its footing.”
Analysts said problems that plagued the market before the presidential election--the dollar, interest rates and the deficits--returned to prey on investor confidence. Those concerns kept institutional investors on the sidelines.
The analysts said further declines in the dollar, which fell sharply in New York Wednesday, kept stocks from advancing. The dollar ended at 1.7540 West German marks, its lowest level since June, down from 1.7635 marks at Wednesday’s New York close. It ended unchanged at 124.05 Japanese yen.
Investors were especially wary after the dollar’s slide Wednesday, analysts said. “People are waiting for more definite news on the dollar (before making commitments),” said Thomas Walsh, head equity trader at Nikko Securities.
Trader James Andrews at Janney Montgomery Scott said concerns over the possibility of further belt tightening by the Federal Reserve Board also kept many investors skittish.
“The biggest problem now is the national debt and balance of trade. The thing to correct it is to tighten credit,” he said.
The Labor Department’s report that wholesale prices, as measured by the producer price index, were flat for October had little impact on stocks. “(Investors) were looking for good PPI numbers. They were good but not great,” Walsh said. “It was not enough to make people come off the sidelines.”
The feeling among analysts was that the market would continue sluggish in the near term but might be preparing for a technical bounce upward. Today’s market was expected to remain quiet, with many offices closed for the Veterans Day weekend.
Among the most active issues on the Big Board, oil stocks were mostly higher. Texaco Inc. shares rose in active trading as investors flocked to the stock on speculation that it may undertake further restructuring. Some analysts speculated that Texaco, which Thursday signed a refining joint venture with Saudi Arabia, might explore a new partnership with the Saudis. Texaco rose 7/8 to 47 1/8. Amoco gained 1/8 to 72 1/2, and Chevron rose 1/8 to 45.
RJR Nabisco rose in heavy trading fueled by rumors that a Japanese company will make a bid for the tobacco and food company at $106 per share, arbitragers said.
In Tokyo, stock prices fell Thursday, reversing a two-day rise after cautious investors opted for the sidelines to see if stock prices could recapture record-high territory. The Nikkei 225-share index lost 46.36 to close at 28,166.42. It rose 205.51 on Wednesday.
In London, prices were little changed. The Financial Times 100-share index finished up 0.5 at 1,826.2.
