Stock Prices Edge Lower; Dow Off 4.11 : Anticipation of Jobless Data Keeps Markets Quiet
The stock market drifted to a small loss Thursday while Wall Street kept a vigil for today’s monthly report on the employment situation.
The Dow Jones index of 30 industrials dropped 4.11 to 2,291.43.
Declining issues slightly outnumbered advances in nationwide trading of New York Stock Exchange-listed stocks, with 675 up, 764 down and 541 unchanged.
Big Board volume totaled 143.16 million shares, down from 167.62 million in the previous session. Nationwide, consolidated volume in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 170.25 million shares.
The market rose Wednesday amid hopes that the employment statistics for February would show a slowing of economic growth.
Such a development could be read as a positive portent for the inflation outlook and a possible easing of upward pressure on interest rates.
However, if the figures come in with an unpleasant surprise, analysts said, the market could suffer a letdown.
Among actively traded blue chips, Philip Morris rose 1/2 to 113 1/8, General Electric gained 1/8 to 45 1/2, International Business Machines dropped 1 to 118 3/8 and American Telephone & Telegraph was unchanged at 30 1/2.
Upjohn was the volume leader, down 2 1/4 at 29 3/8. Responding to an analyst’s report, the company said it was too soon to gauge the effect of new prescription procedures in New York State on sales of two Upjohn tranquilizers.
In Tokyo, share prices closed down, but off lows, in thin, nervous trading. The Nikkei average fell 181.21, or 0.57%, to close at 31,656.45, adding to Wednesday’s 100.28-point loss.
Shares in London closed down but above the day’s lows. The Financial Times 100-share index ended 7.4 points lower at 2,075.9.
CURRENCY
The dollar drifted lower against other major currencies in dull U.S. trading as dealers marked time before the release of February’s unemployment report.
Gold prices rose in domestic dealing after declining overseas. Republic National Bank of New York quoted a late bid of $393.80 an ounce, up $1.90 from Wednesday’s late bid.
“Everybody’s waiting for the unemployment report,” said Fred Barth, chief foreign exchange trader for Prudential-Bache Securities Inc. “Trading was lackluster at best.”
Currency dealers elsewhere around the world reported that activity slackened as market operators awaited release of the U.S. unemployment report by the Labor Department in Washington.
The dollar moved moderately higher against several key currencies in some overseas foreign exchange markets before reversing course in the United States.
In Tokyo, the dollar closed at 129.23 Japanese yen, up from 128.73.
Later in London, the dollar traded at 129.10 yen. The decline continued in U.S. trading, and the dollar was quoted late in New York at 128.80 yen, down from 129.225 late Wednesday.
In London, the British pound fell to $1.7183 late Thursday from Wednesday’s $1.7200. Sterling strengthened in U.S. trading, rising to $1.7220 from $1.7155 on Wednesday.
Gold bullion prices rose in U.S. trading but fell on foreign metal markets.
CREDIT
Bond prices edged lower in quiet trading, also affected by anticipation of the release of February employment figures.
The Treasury’s benchmark 30-year bond fell 5/32 point, or more than $1.50 per $1,000 face amount, while its yield crept up to 9.06% from 9.05% late Wednesday.
Harold Nathan, senior financial economist with Wells Fargo & Co. in San Francisco, said the market expected weak job growth last month, with 250,000 new jobs added. A figure above the consensus likely would send bond prices lower.
In the secondary market for Treasury bonds, prices of short-term governments ranged between 1/16 point and 5/32 point lower, intermediate maturities lost 5/32 point and long-term issues fell 1/8 point, according to Telerate Inc., a financial information service.
The Shearson Lehman Hutton daily Treasury bond index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, slipped 1.17 to 1,124.14.
Corporate bonds moved higher. Moody’s investment grade corporate bond index, which measures price movements on 80 corporate bonds with maturities of five years or longer, rose 0.18 to 298.92.
The federal funds rate, the interest on overnight loans between banks, was quoted at 9.8125%, down from 10.50% late Wednesday.
COMMODITIES
Silver futures prices surged in the final minutes of trading on New York’s Commodity Exchange and settled with the spot-delivery price above $6 an ounce for the first time in nearly six weeks.
On other markets, gold futures also advanced, grains and soybeans rebounded sharply, livestock and meat futures were lower and energy futures retreated.
Silver settled 14.1 to 15.3 cents higher, with the most actively traded contract, for delivery in May, at $6.09 an ounce. The spot contract for March delivery settled at the day’s high of $6.008 an ounce.
Gold settled $1.40 to $1.90 higher with April at $397.30 a troy ounce.
Analysts said the rally was technically inspired, meaning the buying was based on bullish interpretations of chart patterns rather than on any change in market fundamentals.
But the strength of silver relative to gold also suggests that speculators and investors are embracing silver and turning away from gold, the traditional leader of the precious metals group.
“The white knight is finally performing,” said Peter Cardillo, commodity trading adviser with Josephthal & Co., a New York futures brokerage firm. “I think we’re going to see silver emerge as the leader in the next major rally.”
Gold is often perceived as a safe haven for investment dollars in inflationary times, but it has responded poorly to recent government reports of sharp rises in wholesale and consumer prices.
Gold’s sluggish reaction to the inflation signals “suggests to some traders that silver may outperform gold,” said analyst Bette Raptopoulos of Prudential-Bache Securities Inc. in New York.
She said the rally also reflected positioning by traders before today’s unemployment report.
Grain and soybean futures advanced strongly on the Chicago Board of Trade, erasing most of the previous session’s losses amid a variety of bullish factors.
Forecasts for continued dryness in prime winter wheat areas supported the wheat market, as did talk that the Soviet Union was seeking to buy more U.S. wheat at subsidized prices.
Corn futures were boosted by higher cash prices and by concerns about a lack of adequate soil moisture in the Midwest.
Sluggish cash markets pressured livestock and meat futures on the Chicago Mercantile Exchange. Heavy marketings of hogs also weighed on the pork complex.
Energy futures retreated in technically motivated trading on the New York Mercantile Exchange, reversing the previous session’s sharp gains in heating oil.
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