The stock market lost ground for the third straight session today, yielding to a late round of selling.
In the last few days a debate has heated up on Wall Street over whether stocks are due for a pullback after their sharp runup to record highs this summer.
The optimists argue that the market's rise has not yet produced the excesses of speculation and exuberance that typically occur when prices are peaking out.
But talk persists of an impending "correction" as traders seek to cash in profits built up over the first eight months of the year.
Up and Then Down
Brokers say stocks have also been weighed down by doubts that the Federal Reserve will take any further steps in the near future to relax its credit policy.
The Dow Jones average of 30 industrials, up about eight points in the early going, was down 13.10 at 2,706.69 by the close.
That extended its loss for the last three sessions to 45.40 points.
Advancing issues and declines ran about even on the New York Stock Exchange, with 705 up, 701 down and 569 unchanged.
Big Board volume totaled 160.16 million shares, against 161.80 million in the previous session.
The NYSE's composite index lost .40 to 193.78.
Bond prices followed the U.S. dollar higher in thin early trading today.
The Treasury's benchmark 30-year bond was up 5/32 point, or $1.56 per $1,000 face amount, around midday. Its yield, which moves in the opposite direction from price, dropped to 8.09% from 8.10% late Wednesday.
Market strategists said the strength of the dollar overseas was prompting some buying in an otherwise quiet session. Bond and note prices were firmer across the board.
"I think the dominant factor is the continued strength of the dollar," said William Sullivan, director of money market research for Dean Witter Reynolds Inc.
The dollar was quoted at 1.9902 marks in Frankfurt in afternoon trading, slightly higher than its morning level. In Tokyo, the dollar closed at 146.87 yen, up 0.22 yen from Wednesday's close. In afternoon training in London the dollar was quoted at 147.02 yen.
"This is a thin market," Sullivan said. "These (bond) price gains are occurring in very light volume. In truth the only area that's going to provide guidance is the economy, and we don't get any important indicators until next week."
In the secondary market for Treasury bonds, prices of short-term governments were up about 1/8 point, intermediate maturities were 3/32 point higher and long-term issues gained 3/16 point, according to the Telerate Inc. financial information service.
The movement of a point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.
The Shearson Lehman Hutton daily Treasury bond index, which measures price movements on outstanding Treasury issues with maturities of a year or longer, was up 1.34 to 1,179.13.
In corporate trading, industrials were up. Moody's investment grade corporate bond index, which measures total return on a portfolio of 80 corporate bonds with maturities of five years or longer, rose 0.25 to 329.17.
The federal funds rate, the interest on overnight loans between banks, was quoted at 9%, unchanged from late Wednesday.