Dow Pulls Back 2.28 as Profits Are Taken : Prices Generally Hold Steady After Thursday’s Surge
Stock prices pulled back a bit today, hesitating after the yearlong rally that carried the market to record highs on Thursday.
The market appeared to pause as some traders cashed in the dramatic gains of stock prices lately.
But prices generally held steady on the strength of the enthusiasm generated by Thursday’s record high and the widespread public attention it received.
The Dow Jones average of 30 industrials, which had climbed 56.53 points Thursday, slipped back 2.28 to 2,732.36. That left the average with a net gain of 44.39 points for the week.
Volume 165.9 Million
Declining issues outnumbered advances by about 8 to 7 on the New York Stock Exchange, with 701 up, 793 down and 488 unchanged.
Big Board volume totaled 165.93 million shares, down from 225.52 million in the previous session.
The NYSE’s composite index fell .50 to 194.79.
Analysts say the market has been able to recoup the last of the losses it suffered in the crash of 1987 with help from increasing confidence that the Federal Reserve can restrain inflation without causing a recession.
They also note that corporate earnings have risen sharply in the past two years, making the perceived risk in stocks less than it was when the market peaked out two years ago today.
Bond prices rose slightly or stagnated in early activity today, reflecting what traders called a sluggish market largely oblivious to the record levels that have been reached in stocks.
The Treasury’s key 30-year bond rose about 1/8 point or $1.25 per $1,000 in face amount. Its yield, which falls when the price rises, eased to 8.13% from 8.15% late Thursday.
Credit-market strategists said there was no economic news influencing bond prices and many major participants were not active, partly because of summer vacations.
Some said bond investors were awaiting government figures on economic growth and unemployment for August, scheduled for release next week, before deciding their strategies.
The federal funds rate, the interest on overnight loans between banks, traded at 8 15/16%, down from 9 1/16% late Thursday.
