Dow Gains 9.12; Broad Market Drops on Dollar
Stock prices were widely mixed today in an on-again-off-again session.
The Dow Jones average of 30 industrials rose 9.12 to 2,673.06.
But declining issues outnumbered advances by nearly 4 to 3 on the New York Stock Exchange, with 622 up, 811 down and 518 unchanged.
Big Board volume totaled 158.40 million shares, against 158.35 million in the previous session.
The NYSE’s composite index gained .34 to 191.81.
The market had to contend with some renewed weakness in the dollar and an accompanying rise in credit market interest rates.
Prices of long-term government bonds declined slightly, increasing their yields to the 8.25%-8.30% range.
Stocks also were weighed down by International Business Machines Corp.’s disclosure that it expects earnings for the third quarter to be well below what analysts have estimated.
But brokers said buyers were encouraged by takeover news and rumors, notably in the entertainment industry, that seemed to ease recent fears that Wall Street’s boom in buyouts and mergers might be nearing an end.
Bond prices fell slightly in early trading today, showing little reaction to a further slide in the dollar.
The Treasury’s benchmark 30-year bond fell 1/16 point, or 63 cents per $1,000 face amount by midday, and its yield, which rises when prices fall, climbed to 8.24% from 8.23% late Tuesday.
The dollar’s fresh decline made traders skittish, but prices nevertheless held fairly firm in morning trading, said Kevin Flanagan, money market economist at Dean Witter Reynolds Inc.
The dollar fell sharply Monday after central banks of the Group of Seven industrialized nations flooded the market with dollars from their reserves. The dollar roughly stabilized Tuesday but resumed its fall today under the pressure of continued central bank selling.
In the secondary market for Treasury bonds, prices of short-term, medium-term and long-term governments all fell about 1/16 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, fell 0.72 to 1,170.37.
