Dow Slips 0.19 to 2,687.31 in Seesaw Session
The stock market closed narrowly mixed in featureless trading Tuesday after getting a boost early in the day from new economic data that showed good news on inflation.
The Dow Jones index of 30 industrials lost 0.19 point to finish at 2,687.31 after gaining more than 10 points during the session.
Advancing issues narrowly outpaced decliners in nationwide trading of New York Stock Exchange-listed stocks, with 739 issues up, 696 down and 536 unchanged.
The market opened higher and remained above Monday’s levels until the final hour of trading when a mixture of factors pushed the market lower.
“There’s no particular reason that the market backed off,” said Hugh Johnson, senior vice president at First Albany Corp. “There was some program trading but that’s not the reason. If there’s anything that explains the late decline I would say it’s the slight retreat in bond prices after their early gains.”
Blue chip issues led the stock market after the government reported on consumer prices and housing construction. But the gains were limited as the broader market lagged, analysts said.
Big Board volume was 141.61 million shares, up from 136.94 million in the previous session, with many institutional investors remaining cautious in light of recent sharp declines in the junk-bond market.
Nationwide, consolidated volume in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 168.168 million shares.
Among actively traded issues on the New York Stock Exchange, Manufacturers Hanover rose 2 1/4 to 44 after Monday’s announcement that it had agreed to sell a stake in the company to Japan’s Dai-Ichi Kangyo Bank Ltd. in an effort to improve its capital position.
AT&T; rose 3/8 to 42, DuPont gained 3/4 to 117 and Phillip Morris advanced 2 1/4 to 158 5/8.
Avon, the NYSE’s most active stock, fell 2 1/8 to 31 3/4, Varian slid 1 1/4 to 25 3/4 and Ames Department Stores lost 7/8 to 16 5/8.
In Tokyo, stocks closed with marginal losses. the Nikkei index of 225 selected issues closed 1.47 at 34,471.07.
Stock prices in London were moderately lower. The Financial Times-Stock Exchange 100-share index closed 12.3 lower at 2,361.5, nearly 10 points above a session low of 2,351.4 and off the day’s high of 2,379.4.
Credit
Treasury bond prices inched lower.
The Treasury’s bellwether 30-year bond lost 1/32 point, or 31 cents for every $1,000 in face value. Its yield held at 8.09%, the same as late Monday.
Government reports that housing construction fell 5% in August as the consumer price index held steady during the month at July’s levels normally would have supported bond prices, analysts said.
In trading in the secondary market for Treasury securities, prices of short-term government issues lost 3/32 point, intermediate maturities were unchanged to 1/16 point lower and 20-year issues were unchanged, according to figures provided by Telerate Inc., a 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 all outstanding Treasury issues with maturities of a year or longer, fell 0.09 to 1,182.06.
Corporate issues edged higher. 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, gained 0.14 to 332.19.
In the tax-exempt market, the Bond Buyer index of 40 actively traded municipal bonds fell 3/8 point to 925/32 point. The average yield to maturity rose to 7.41% from 7.37% late Monday.
Yields on three-month Treasury bills auctioned Monday rose to 7.97% as the discount rose 9 basis points to 7.72%. Yields on six-month bills auctioned Monday climbed to 8.08% as the discount rose 4 basis points to 7.67%. Yields on one-year bills rose to 8.08% as the discount rose 1 basis point at 7.54%.
A basis point is one-hundredth of a percentage point. The yield is the annualized return on an investment in a Treasury bill. The discount is the percentage that bills are selling below the face value, which is paid at maturity.
The federal funds rate, the interest on overnight loans between banks, was quoted at 8.875%, unchanged from late Monday.
Currency
The dollar turned mixed in nervous worldwide trading amid reports that the Federal Reserve intervened to keep the currency down.
Gold prices declined.
On the Commodity Exchange in New York, gold bullion for current delivery settled at $361.20 an ounce, down 50 cents from late Monday. Republic National Bank quoted a late bid for gold of $360 an ounce, off 70 cents.
Zlatko Glamuzina, chief dealer at the New York office of Banco di Sicilia, said reports that the Fed sold small amounts of dollars added to the tension of an already nervous market after Friday’s sharp decline. Last week’s downturn had followed the release of mixed economic reports and rumors.
In Tokyo, where trading ends before Europe’s business day begins, the dollar fell 0.70 yen to close at 145.73 yen. The dollar traded at 145.55 yen in London, and at 145.85 yen in New York, down from 145.93 yen Monday.
The dollar was mixed against the British pound. The pound firmed to $1.5720 in London, compared to $1.5695 late Monday. Sterling fetched $1.5710 in New York, unchanged from late Monday.
Other late dollar rates in New York, compared to Monday’s quotes, included: 1.9535 West German marks, up from 1.9523; 1.6905 Swiss francs, up from 1.6840; 6.60105 French francs, up from 6.5830; 1.18455 Canadian dollars, up from 1.18335, and 1,406.50 Italian lire, up from 1,404.50.
Late dollar rates in Europe compared to Monday: 1.6870 Swiss francs, up from 1.6850; 6.5875 French francs, down from 6.5890; 2.2000 Dutch guilders, down from 2.2180; 1.1833 Canadian dollars, down from 1.1834, and 1,406.50 Italian lire, down from 1,417.40.
Commodities
Soybeans for spot delivery on the Chicago Board of Trade fell to a 22-month low on a combination of harvest pressure and position-evening in the September contract ahead of its expiration today.
Other soybean contracts closed mostly higher while most corn and wheat futures retreated amid increased corn harvesting and slack export demand for U.S. grains.
On other commodity markets, energy futures were sharply lower; cocoa futures advanced; livestock and meat futures were mixed, and precious metals inched lower.
Aside from the drop in the September soybean contract, the markets held up well in the face of the advancing harvest and forecasts for continued beneficial crop weather.
Crude oil futures fell steeply on the New York Mercantile Exchange, paced by liquidation in the expiring October crude oil contract, which goes off the board today.
West Texas Intermediate crude oil settled 4 to 32 cents lower, with October at $19.56 a barrel; heating oil was 0.43 to 0.77 cent lower, with October at 54.95 cents a gallon, and unleaded gasoline was 0.34 to 0.50 cent lower, with October at 57.67 cents a gallon.
