Dow Sinks 17.34 Amid Concerns Over Tokyo

Stock prices lost ground today in a mood of caution over the touchy state of the Tokyo market.

The Dow Jones average of 30 industrials, up 36.26 points on Tuesday, dropped back 17.34 to 2,719.37.

Declining issues outnumbered advances by about 8 to 5 on the New York Stock Exchange, with 586 up, 915 down and 472 unchanged.

Big Board volume totaled 159.54 million shares, against 154.31 million in the previous session.

The NYSE’s composite index lost 1.24 to 187.31.

U.S. stocks lately have appeared to benefit by comparison with the Tokyo market, which has undergone a severe shakeout.

Alongside Japanese stocks, American issues are seen as conservatively valued in relation to earnings. So far the jolts in Tokyo trading have had few ripple effects on Wall Street.

However, brokers said investors grew uneasy this afternoon as speculation spread that the Japanese market might be in for a further battering on Thursday.

They also noted worries over the outlook for domestic corporate profits. When earnings reports for the first quarter are issued over the next few weeks, they are expected to show the continued effects of slower growth and wary attitudes among consumers and business planners.

Bond prices were mixed in a narrow range in early trading today as the credit markets awaited news on two upcoming government bond issues.

The Treasury’s benchmark 30-year bond rose 3/32 point, or about 94 cents per $1,000 face amount, while its yield, which falls when prices rise, fell to 8.60% from 8.61% late Tuesday.

Traders said the market was quiet as it waited for announcements expected in the afternoon on two bond issues set for next week: the Treasury’s seven-year note auction and the Resolution Funding Corp.’s 40-year bond sale.

The market expected the Treasury to sell $7.5 billion in seven-year notes, while it anticipated the savings and loan bailout agency would auction $4 billion to $4.5 billion of its bonds.

New bond issues would increase the supply of debt securities on the market and could affect prices.