FINANCIAL MARKETS : STOCKS : Dow Down 8.79 After Selloff at End of Session
The Dow Jones index of 30 industrials plunged 30 points in the last hour of trading Thursday after a last-minute selloff sparked by a rumor about a Japanese scandal.
The closely watched index closed lower for the fourth straight session, ending at 2,574.77, off 8.79 points. The Dow has fallen 74.78 points since Feb. 15, its last gaining session.
Big Board volume was a strong 184.3 million shares on the New York Stock Exchange, compared to Wednesday’s 159.2 million.
In the broader market, advancing issues nearly matched declining issues in nationwide trading of New York Stock Exchange-listed stocks, with 715 up, 753 down and 508 unchanged.
The market was sharply higher for most of the day, as investors hunted for bargains and drew optimism from remarks by Federal Reserve Board chairman Alan Greenspan. The market also benefitted from renewed strength on the Tokyo market and from a firming in the price of U.S. government debt securities.
Gordon L. Smith, a managing director at Alex. Brown & Sons Inc., a Baltimore brokerage, said computerized sell programs linked to stock-index futures kicked in during the last hour of trading.
The robust advance earlier in the day was fueled partly by lessening concerns about inflation. Greenspan told the Senate Banking Committee that he did not see inflation accelerating despite a 1.1% jump in consumer prices last month.
Pfizer dropped 4 1/2 to 59 1/4 on renewed fears about product-liability cases arising from a heart valve the company withdrew in 1986. The fall followed publication of an article Thursday in Investor’s Daily newspaper.
On London’s Stock Exchange, share prices finished higher after Wall Street’s robust start. The Financial Times 100-share index rose 9.5 points to close at 2,269.2.
CREDIT Auction Results Give Bond Prices a Lift Bond prices rose sharply as traders were reassured by the results of an auction of Treasury notes and by Greenspan’s comments on inflation.
The Treasury’s bellwether 30-year bond, which rose 5/16 point Wednesday, picked up 23/32 point, or about $7.19 for every $1,000 in face value. Its yield dropped to 8.56% from 8.64% late Wednesday.
The federal funds rate, the interest rate banks charge each other on overnight loans, was quoted at 8.25%, down from 8/313% late Wednesday.
CURRENCY Dollar Mostly Lower Except Against Yen The dollar rose against the Japanese yen in lackluster trading but finished mostly lower against other major currencies.
Traders said the spotlight was fixed on the Japanese yen, which lost ground against most major currencies.
The dollar rose to its highest level since September against the yen, which languished amid dimmed prospects for higher interest rates. The market had been expecting the Bank of Japan to raise the nation’s key discount rate.
Earlier in Europe, the dollar put in a mixed performance while confined to well-established ranges. When trading shifted to the United States, the dollar appeared to firm but ultimately finished lower against all major currencies except the yen.
In Tokyo, the dollar closed at 145.23 yen, up 0.08 yen from Wednesday’s close. Later in London, the dollar traded at 145.90 yen. In New York the dollar continued to rise, closing at 146.53 yen, up from 145.50 yen on Wednesday.
In London, the British pound held steady at $1.7145. In New York it cost $1.7133 to buy one pound, more expensive than Wednesday’s $1.7125.
Gold prices fell worldwide. On New York’s Commodity Exchange, gold bullion for current delivery settled at $415.70 an ounce, down $2.30 from late Wednesday. Republic National Bank in New York quoted a late bid for gold at $416.20 an ounce, off $1.60.
Gold fell in London to a late bid price of $417.45 an ounce, from $418.85 bid late Wednesday.
Silver prices also fell. On New York’s Comex, silver bullion for current delivery slipped to $5.268 an ounce, from $5.272 on Wednesday. In London the metal fell to a late bid price of $5.28 an ounce, from Wednesday’s $5.33.
COMMODITIES Coffee Futures Hit 7-Month Highs Coffee futures prices reached seven-month highs on New York’s Coffee, Sugar & Cocoa Exchange in a rally fueled by supply worries and strong technical signals.
On other commodity markets, precious metals weakened; petroleum futures rose; wheat and corn futures advanced while soybeans retreated, and most livestock and meat futures moved higher.
Coffee futures settled 1 cent to 2.25 cents higher, with the contract for delivery in March up 1.52 cents at 91.16 cents a pound, the highest close for March coffee since July 21 and the highest for a near-month coffee contract since July 6.
Analysts linked the advance to perceptions that high-grade coffee beans are becoming more difficult to obtain and speculation that more coffee-producing nations may be forced to cancel coffee shipments due to dwindling old-crop supplies and poor growing conditions for the new crop in South America.
Mexico reportedly canceled some of its export commitments two weeks ago.
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