Pessimism Depresses Dow, It Drops by 11.88
Prices closed mixed on Wall Street today amid continued apprehension about the economy and pessimism about takeover stocks.
The Dow Jones industrial average fluctuated in a narrow range for much of the day as investors traded cautiously in advance of several big economic reports due out this week.
But in the last half-hour of trading, stocks took a sharp dive, with the Dow Jones average dropping nearly 39 points, as computer-program traders began to sell heavily. The average recovered some ground, but closed down 11.88 at 2,905.45.
Advancing issues outnumbered decliners by 10 to 9 on the New York Stock Exchange, with 800 up, 720 down and 469 unchanged.
Big Board volume totaled 173.81 million shares, against 146.47 million in the previous session.
The NYSE’s composite index rose 0.42 to 194.60.
At the American Stock Exchange, the market value index fell 0.05 to 353.60.
A steep decline in the price of UAL Corp. stock set off the drop.
The trade publication American Banker said today that Citicorp and Chase Manhattan Corp. representatives did not attend a meeting Friday on possible bank financing for the planned $4.38 billion employee buyout of the parent of United Airlines. The report cast doubt on the viability of the deal.
Michael Metz, an analyst with Oppenheimer & Co., said many investors stayed out of market because of growing concern that the country might be heading into a recession.
“When in doubt, do nothing” was the attitude on Wall Street, Metz said.
The government was announcing its index of leading economic indicators on Wednesday, the same day that the National Assn. of Purchasing Management was releasing its monthly survey on the manufacturing economy.
Bond prices were mostly lower in early trading today as a sharp rise in new home sales dampened a perception the economy was heading toward recession.
The Treasury’s benchmark 30-year bond was down 3/32 point, or 94 cents per $1,000 face amount, around midday. Its yield, which rises when prices fall, was up to 8.41% from 8.40% late Monday.
In the secondary market for Treasury bonds, prices of short-term governments were unchanged to down 1/32 point, intermediate maturities were unchanged to down 3/32 point and long-term issues were off as much as 5/32 point, according to Telerate Inc., a financial information service.
