Financial Markets : STOCKS : Economic Fears Hold Dow to 1.80 Advance
Stock prices ended mixed Thursday after rolling back a moderate midday gain as concerns about the U.S. economy and first-quarter corporate profits mounted.
The Dow Jones index of 30 industrials, which had been down 17.34 points Wednesday, rose 1.80 to 2,721.17.
Declining issues slightly outnumbered advances in nationwide trading of New York Stock Exchange-listed stocks, with 703 up, 744 down and 540 unchanged.
Big Board volume came to 144.17 million shares, against Wednesday’s 159.54 million.
Many investors held their positions ahead of March employment figures due this morning.
Traders had feared the Tokyo market would fall sharply overnight after rumors swept Wall Street on Wednesday that a Japanese brokerage might be in trouble.
But the rumors were not substantiated, and the key 225-share Nikkei index eased 193.88 points to close at 28,249.06.
The moderate fall in Tokyo eased nerves in New York and the Dow managed to gain about 13.06 points by mid-session. But in the last hours of trading, the gain was pared back as concerns about the economy gained momentum.
Traders said they were nervous about the unemployment data, the first official indication of the economy’s performance last month. A Reuters poll of economists forecast a steady 5.3% unemployment rate and a sharp decline in new job growth.
“All eyes are on tomorrow’s employment figures,” said Trude Latimer of Josephthal & Co. “People are hoping the data will support the view that we have a slow- or no-growth economy.”
The markets have also been dominated by concerns about first-quarter corporate profits, which are beginning to stream in slowly.
Among Japanese issues traded on U.S. exchanges, Matsushita Electrical climbed 7 7/8 to 144 1/2; Kyocera 3 3/4 to 100; Hitachi 7 1/4 to 104 1/4, and Honda Motor 1 1/4 to 23 1/8.
Tandem Computers led the active list, down 4 3/4 at 22 1/2. The company said revenue for the fiscal quarter that ended last weekend fell short of its target.
Bank stocks were also notably weak, faced with what analysts described as the prospect of a long and arduous review by government regulators of lending practices in the industry.
Bankamerica dropped 1 1/4 to 26 3/8; First Chicago fell 1 to 29; Citizens & Southern Corp. lost 1 1/4 to 25 1/4; Bank of Boston slid 1 1/8 to 12 3/4; Manufacturers Hanover dipped 1 1/8 to 30 3/4, and Bank of New York fell 2 1/2 to 31 1/4.
In London, shares recovered from losses around midday and closed at the day’s high, helped by early gains on Wall Street. The Financial Times 100-share index closed 7.9 points higher at 2239.5.
CREDIT Bond Prices Dip in Quiet Session Bond prices slipped in light trading as the market awaited news on March’s unemployment figures.
The Treasury’s benchmark 30-year bond fell 5/32 point, or $1.56 for every $1,000 in face amount. Its yield, which rises when prices fall, rose to 8.51% from 8.50% late Wednesday.
Traders said there was little news to affect the market. Prices opened lower, which traders attributed to profit taking in the wake of a rally Wednesday. That rally was spurred by an unconfirmed rumor that a Japanese investment firm might be unable to meet a margin call to pay for its stock purchases.
The federal funds rate, the interest rate banks charge each other on overnight loans, was quoted at 8.25%, unchanged from late Wednesday.
CURRENCY Dollar Closes Mixed; Gold Prices Drop The dollar finished mixed in dull trading on world currency markets.
Gold prices fell in the United States after rising overseas. On the Commodity Exchange in New York, gold bullion for current delivery settled at $374.80 an ounce, down $2.30 from late Wednesday. Republic National Bank of New York quoted a late bid for gold of $375 an ounce, down $2.75.
The dollar’s only significant move came against the Japanese yen. The dollar lost one yen against the Japanese currency in Asian trading and fell further as trading shifted to Europe and later to the United States.
Dealers stressed that trading was quiet overall. Investors remained on the sidelines while awaiting the weekend meeting of the Group of Seven industrial nations and today’s release of U.S. unemployment figures for March.
Finance officials from the United States, Japan, West Germany, Britain, France, Italy and Canada were planning to meet in Paris to review international exchange rates.
Dealers said they had expected the dollar’s decline against the yen following speculation that monetary authorities might take action to prop up the sagging Japanese currency.
In Tokyo, the dollar closed at 157.90 yen, down 1 yen from Wednesday. Later in London, the dollar was quoted lower at 157.74 yen. In New York, the dollar closed at 157.50 yen, down from 158.88 yen on Wednesday.
In London, the British pound rose to $1.6427 from $1.6416 late Wednesday. In New York, one pound cost $1.6420, more expensive than Wednesday’s $1.6406.
COMMODITIES Petroleum Futures Off; Supply Is Cited Petroleum futures prices fell sharply on the New York Mercantile Exchange, dropping for the third straight day amid perceptions that gasoline and crude oil supplies are outstripping demand.
On other commodity markets, soybeans surged while grains were mixed; copper futures fell; precious metals retreated; and livestock and meat futures were mostly higher.
West Texas Intermediate crude oil futures settled 26 to 43 cents lower, with the contract for delivery in May at $19.43 a barrel; heating oil was 0.71 cent to 1.16 cents lower, with May at 53.31 cents a gallon; unleaded gasoline was 1.05 to 1.71 cents lower, with May at 63.29 cents a gallon.
Analysts said there was no change in supply-and-demand factors Thursday to account for the selloff. But traders have turned increasingly bearish amid signs of a rising crude oil production and steady stockpiling of gasoline.
Soybean futures surged into the close of trading on the Chicago Board of Trade amid expectations for new export sales, while grain futures finished mixed.
Soybean exports from Brazil to Europe have been slowed by confusion over economic reforms launched last month in the South American country, prompting speculation that importers may turn to the United States to meet their needs.
In other export developments, analysts said the Soviet Union is rumored to have bought as much as 1 million metric tons of corn recently. They said some of those purchases may have been reflected in Agriculture Department announcements this week of a total of 221,000 metric tons of U.S. corn sold to unknown destinations.
Wheat futures settled 0.75 cent lower to 0.25 cent higher, with May at $3.70 a bushel; corn was 0.50 cent lower to 2 cents higher, with May at $2.7025 a bushel; oats were 0.25 cent lower to 0.50 cent higher, with May at $1.5275 a bushel.
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