STOCKS : Dow Falls 15.36 in 2nd Straight Day of Losses
Stock prices closed lower Wednesday for the second day in a row, pummeled by computer-driven program and technical selling as buyers continued to worry about weak corporate profits and lower markets overseas.
The Dow Jones index of 30 industrials fell 15.36 to 2,750.64, bringing its drop over the past two sessions to 43.73 points.
Declining issues outnumbered advances by more than 2 to 1 in nationwide trading of New York Stock Exchange-listed stocks, with 516 up, 1,053 down and 417 unchanged.
Analysts said traders were disappointed with the market’s uninspired performance over the past several sessions since it began the new year with a sharp rise to a record high in the Dow.
Traders said country funds and gold mining stocks rose as they were perceived to be safe havens. However, by and large, the market was depressed.
“The institutional buyer hasn’t been a buyer,” said David Holt, Wedbush Morgan Securities’ director of technical research. He said people were waiting to see fourth-quarter earnings announcements over the next few weeks before committing themselves.
Some observers argue that hopes for an early-1990 rally had been running so high that they left stocks vulnerable to a letdown.
Wall Street also was bracing uneasily for corporate fourth-quarter earnings reports due out over the next few weeks.
Profit projections for the period have been coming down steadily as evidence accumulated that the pace of business activity was sluggish at best.
Germany Fund bucked the downtrend in dramatic style, surging 3 1/4 to 24 1/8. Traders continued to bid enthusiastically for that and other “country” closed-end funds, seeking a way to benefit from new worldwide trade opportunities in the ‘90s.
Elsewhere in the group, Helvetia Fund rose 1 1/4 to 17 1/8; Thai Fund added 1 1/8 to 35 3/8; Malaysia Fund gained 1 7/8 to 24 3/8; Italy Fund edged up 1 to 18; Brazil Fund rose 1 1/4 to 15, and Austria Fund added 1/2 to 22 3/4.
Delta Air Lines dropped 1 5/8 to 66 3/4. The company said its results for the fourth quarter didn’t measure up to its earlier expectations.
MGM-UA Communications, which indicated that it had ended active efforts to find an acquirer, lost 1 to 14 1/4.
Big Board volume rose to 175.99 million shares, against Tuesday’s 155.21 million.
Shares finished sharply lower on the London Stock Exchange. London took its cue from recent weak performances in New York and Tokyo, and then proceeded to drift lower as investor interest dwindled. The Financial Times 100-share index fell 23.7 points, or 1%, at 2,412.6 points.
CREDIT Dollar, Auction Aid Treasury Bonds Treasury bond prices finished unchanged to marginally higher, buoyed by a rebounding dollar and an auction of government securities.
High-risk, high-yield junk bonds declined about 1/4 point amid nervousness about Campeau Corp., widely believed to be on the brink of putting its U.S. retailers under bankruptcy court protection from creditors.
The Treasury’s closely watched 30-year bond rose 3/32 point, or 94 cents for every $1,000 in face value. Its yield, which falls when the price advances, slipped to 8.08% from 8.09% late Tuesday.
Analysts said bond prices were lifted by a rallying dollar and a Treasury auction of seven-year notes that was said to be well received by investors.
The federal funds rate, the interest on overnight loans between banks, was quoted at 8.25%, up from 8.188% late Tuesday.
CURRENCY Dollar Higher as Central Banks Act The dollar ended mostly higher against major foreign currencies in volatile trading following reports of central bank intervention.
Currency dealers said the dollar initially fell due to the continued strength in the West German mark. But they said reports that the Federal Reserve bought dollars for marks and that West Germany’s central bank sold marks for yen gave a lift to the dollar.
