Dow Slips 1.43; Stocks Mixed in Dull Trading : Investors Awaiting Trade Deficit Report
Wall Street’s blue chip index ended a three-day rally Monday, while the broader market gained in lackluster trading ahead of Wednesday’s report on the November U.S. trade deficit.
The Dow Jones index of 30 industrials, which had gained ground in seven of the eight preceding sessions, slipped 1.43 to 2,224.64.
Advancing issues slightly outnumbered declines in nationwide trading of New York Stock Exchange-listed stocks, with Big Board volume falling to 117.38 million shares from Friday’s 132.32 million
The Dow rose early to a high of 2,231.61 and stayed locked within a 10-point range. Stocks could not make much headway in the muted market, traders said.
Trading had been expected to be light because of the absence of many investors taking a holiday in observance of Dr. Martin Luther King Jr.’s birthday.
Analysts said the mood of the markets had been brightening gradually as the rally in stock prices that began last November continued into the new year.
By the end of last week, several primary indicators of market trends stood at their highest levels since the crash in October, 1987.
However, brokers said some traders were selling Monday to cash in on those gains. Many Wall Streeters worry that the rally cannot make much more progress unless interest rates turn downward.
Investors Cautious
“There was no news to move the market and it lacked carry-over momentum to push stocks one way or the other,” said strategist Rao Chalasani at Prescott Ball & Turben Inc.
“Everyone seems to be waiting for the shoe to drop,” said Gruntal & Co.’s director of technical research, Gene Jay Seagle. “We’re continually testing the problem, whether it’s (high) interest rates, or the trade figure. That creates a dull market.”
Another question mark in many minds is the government’s impending monthly report Wednesday on the nation’s position in international trade.
Advance estimates at leading brokerage houses generally call for the U.S. trade deficit to widen for November to $11 billion or more from the $10.3-billion gap reported for October.
In the action that did take place Monday, takeover news and rumors provided the dominant theme.
In the credit markets, corporate and municipal bond prices were little changed in quiet holiday trading.
The domestic Treasury bond market was closed for the holiday, but in London, U.S. government issues traded slightly higher.
Moody’s investment grade corporate bond index, which measures price movements on 80 corporate bonds with maturities of five years or longer, rose 0.01 to 296.75.
Municipal bonds edged higher. The Bond Buyer index of 40 long-term bonds was up 1/16 to 92 5/32.
Aids Other Issues
Among takeover issues, Texas Eastern Corp. shares jumped 14 3/4 to 45 on volume of 7.2 million shares. Coastal Corp., whose stock fell 3/4 to 34 1/8, said it will begin a $42-a-share tender for the gas pipeline company today.
Texas Eastern’s rise helped other pipeline stocks as well. Transco Energy Co. advanced 1 1/4 to 36 1/8, Panhandle Eastern Corp. gained 1 to 26 1/2 and Enserch Corp. added 3/8 to 19 3/8.
Shares of Rockingham Bancorp almost doubled, soaring 6 7/8 to 14 5/8 on news that Eastern Bancorp agreed to buy the New Hampshire thrift for $17.75 a share.
United Airlines’ parent UAL Corp. rose 1 5/8 to 112 5/8. UAL said the rise was related to a press report that investor Saul Steinberg may have acquired almost 5% of the firm.
Sound Warehouse advanced 2 5/8 to 24 5/8. The Dallas-based home entertainment retailer signed an agreement to merge with Shamrock Holdings Inc. for $25.65 a share in cash.
International Business Machines rose 7/8 to 124 1/4 in anticipation that the company will report stronger fourth-quarter earnings Wednesday, analysts said.
In foreign trading, share prices finished higher Monday but below their session peaks on the London Stock Exchange, buoyed by more signs that recent rises in British interest rates are starting to curb consumer spending. The Financial Times 100-share index rose 9.7 to 1,871.8. It had been up 15 points earlier in the day.
The Tokyo Stock Exchange was closed for a national holiday.
