STOCKS : Prices Continue to Slide; Dow Loses 19.84
Prices declined broadly on Wall Street on Monday as pessimism about the economy--which sent stocks sharply lower on Friday--took a further toll on the market.
“They don’t see any reason to take an aggressive stand on the buy side,” Michael Metz, an analyst with Oppenheimer & Co., said of traders.
The Dow Jones industrial index fell 19.84 to 2,669.37.
Declining issues outnumbered advancers by about 11 to 4 in nationwide trading of New York Stock Exchange-listed issues, with 395 stocks rising, 1,091 falling and 466 unchanged.
Big Board volume totaled a moderate 140.59 million shares, down from 183.88 million Friday.
Analysts said the malaise that settled over Wall Street after two negative economic reports Friday remained in place Monday.
Bargain hunters who might normally enter the market after a sharp loss stayed on the sidelines Monday, said Dennis Jarrett, an analyst with Kidder, Peabody & Co. Jarrett described traders as apathetic.
A telephone company circuit failure halted delivery of markets data Monday from the New York and American stock exchanges to Associated Press.
As a result, some of the stock tables compiled and transmitted by the AP were delayed and others did not reflect final closing prices for some stocks.
AP said the outage appeared to be a local problem in New York and not related to widespread long-distance calling problems with American Telephone & Telegraph Co.
Stock prices finished lower on the London Stock Exchange, although well above the day’s lows. The Financial Times 100-share index fell 13.9 points to close 2,366.2.
CREDIT Campeau Filing Hits Junk Bonds Junk bond prices fell after a bankruptcy court filing by two Campeau Corp. units, whose financial troubles triggered the high-yield bond market’s severe tailspin last fall.
“Whenever that happens it is a disturbing event and it’s a drag on the market and it was,” said Robert Lupo, director of high-yield bond research at Smith Barney, Harris Upham & Co.
Traders said issues of high-yield bonds on average fell about 1/4 point to 1/2 point. The movement of a point equals a change of $10 on a $1,000 bond. The widely watched 13.71% RJR Holdings Capital Corp. bond due in 2009 was down about 7/8 point at 90 7/8.
The decision by Campeau’s Federated Department Stores Inc. and Allied Stores Corp. to seek protection from creditors under Chapter 11 of federal bankruptcy law drew a subdued reaction because it had been expected, traders said.
The government securities market was closed Monday. Prices of corporate and municipal bonds were slightly lower in quiet trading, said Eric Friedlander, a corporate bond trader with Prudential-Bache Securities Corp.
In the tax-exempt market, the Bond Buyer index of 40 actively traded municipal bonds was 92.875, down 3/32 point. The average yield to maturity rose to 7.30% from 7.29% late Friday.
CURRENCY Dollar Gains in Light Trading The dollar rose against most major foreign currencies in light trading, as holidays in Japan and the United States sharply reduced worldwide activity.
Gold prices also advanced. Republic National Bank of New York quoted a late bid of $414.80 an ounce, up from $414.50 late Friday. On New York’s Commodity Exchange, gold bullion for current delivery rose to $413.70 an ounce from $413.20 last Friday.
Dealers said trading activity was reduced due to the Martin Luther King Day holiday in the United States and a national holiday in Japan, both of which closed banks--the biggest players in the world foreign-exchange market.
Dealers in Europe said the dollar’s rise was fueled by a weakening of the West German mark against the Japanese yen and against the British pound.
The mark was pushed lower by an initial drop in Frankfurt, West Germany, share prices that was sharper than many traders had expected following Friday’s fall on Wall Street. The mark has derived support in recent months from foreign investor interest in West German shares.
COMMODITIES Warm Weather Cools Oil Prices Heating oil futures prices tumbled on the New York Mercantile Exchange as unseasonably warm weather spread across the country, easing demand for home heating fuel.
On other commodity markets, orange juice futures ended mixed after soaring early in the session. Futures prices for precious metals, grains and soybeans, and livestock and meat also finished mixed.
Most wholesale heating oil futures fell 1.85 to 2 cents, the permitted daily limit. The contract for delivery in February, on which the limit has been lifted pending its Jan. 31 expiration, crashed 5.05 cents to settle at 64.60 cents a gallon.
Futures prices for West Texas Intermediate crude oil tumbled 22 to 77 cents with February at $22.36 a barrel; unleaded gasoline futures settled 1.14 to 1.5 cents lower with February at 63.59 cents a gallon.
The plunge in heating oil prices marked the first downturn in the February contract in a week. The selloff was largely a reaction to spring like weather in much of the northern United States, especially the populous Northeast, where record-breaking cold in December had spurred strong demand for heating oil and pushed prices up sharply.
