STOCKS : Dow Dips 0.99 in Day of Very Light Trading
Stocks closed mixed Tuesday in the lightest trading yet this year as investors failed to come into the market in appreciable numbers after the three-day holiday weekend.
The Dow Jones industrial index lost 0.99 point to close at 2,613.37. It had been down as much as 30 points, as oil prices moved sharply higher again.
In the broader market, declining issues outnumbered advancing ones by about 8 to 7 on the New York Stock Exchange, with 673 up, 814 down and 473 unchanged. Still, most broad market indexes rose for the day. The NYSE composite index added 0.16 points to 177.13.
Big Board volume came to a scant 92.94 million shares, the lowest volume of the year, down from 96.48 million Friday. Tuesday’s volume was the lowest since Dec. 26, 1989, when 77.6 million shares changed hands. Traders said many market participants apparently extended the Labor Day holiday weekend an additional day.
Concern over the apparent stalemate in the Middle East crisis and apprehension about upcoming U.S. economic data--especially Friday’s scheduled release of August unemployment statistics--kept many investors on the sidelines, analysts said. Emerging news seemed to have little impact on stock prices.
The National Assn. of Purchasing Managers said its index fell slightly in August, indicating further weakness in manufacturing.
Last week, a decline in oil prices had helped the Dow industrials recover more than 80 points. But by Tuesday the failure of United Nations peace efforts and the first seizure of an Iraqi ship by the United States under a U.N. blockade imposed after the conquest of Kuwait had revived worries over a major confrontation in the Gulf.
“What really has people concerned is that this thing could drag on,” said Tom Callahan, executive vice president at Yamaichi International Securities.
Among the market highlights:
* The Dow’s weakness was centered in GM, down 3/4 to 39; GE, down 3/4 to 61 1/4, and Navistar, off 1/4 to 2 7/8.
* Oil stocks were mostly higher. Arco rose 3/4 to 135 5/8, Unocal gained 1/2 to 32 1/2, and Baker Hughes jumped 1 3/8 to 31 7/8. But Occidental lost 3/8 to 23 1/4, taking it closer to its 52-week low of 22 1/4. Elsewhere, Texas Petroleum rose 7/8 to 23 3/4 following reports that a senior official of Taiwan’s state-owned Chinese Petroleum is planning a bid for the company.
* Pinnacle West Capital plunged 3 3/4 to 12 3/8. Pacificorp terminated its attempt to acquire control of Pinnacle in exchange for a power swap with the company’s Arizona utility unit.
* Adobe Systems soared 3 1/8 to 28 1/8 after the software firm said Apple Computer agreed to expand its technology licensing pact for Adobe products.
* Tokos Medical jumped 1 5/8 to 11 5/8. The provider of home health-care services for pregnant women completed a merger with a rival firm, and Donaldson, Lufkin & Jenrette Securities repeated its “buy” recommendation on Tokos.
In Tokyo, continued pessimism about the Middle East pushed stocks sharply lower for the second day running. Tokyo’s key 225-share Nikkei index closed down 512.79 points or 2.0% at 24,907.64 after falling 577.94 Monday.
In London, shares also closed lower. The Financial Times 100-share index ended off 18.6 points at 2,148.0 in thin volume.
In Frankfurt, stocks tumbled more than 2% on low volume on worries about higher interest rates. The DAX index of 30 leading shares fell 39.15 points, or 2.4%, to close at 1,590.07.
CREDIT Bond Yield Tops 9% on Weak Sales Bond prices were mostly weak in light post-holiday trading as oil prices surged.
The Treasury’s benchmark 30-year bond fell 5/16, or $3.13 per $1,000 face amount, while its yield, which rises when prices fall, rose to 9.01% from 8.98% late Friday.
The federal funds rate, the interest rate banks charge each other on overnight loans, was quoted at 8.125%, up from 8.063% Friday.
CURRENCY Dollar Hits 1990 Lows Against Yen The dollar opened sharply lower against the Japanese yen today in Tokyo, hitting 1990 lows against the Asian currency after finishing mixed in Tuesday’s New York trading.
The dollar stood in Tokyo at 142.35 yen in mid-day trading, down from Tuesday’s 144.05-yen finish.
The dollar fell to 143.40 Japanese yen in New York Tuesday, compared to 143.79 late Friday. U.S. markets were closed Monday for Labor Day.
Also in New York, the dollar ended at 1.581 German marks Tuesday, compared to 1.583 in London Monday.
COMMODITIES Investors Shy Away from Gold, Silver Investors burned by last week’s gold collapse were reluctant to re-enter the precious metals market despite surging oil prices and a lower stock market.
Gold futures settled only slightly higher on the Commodity Exchange with the contract for delivery in September up $1.40 at $383.70 an ounce. Silver futures lost ground, meanwhile, with September contracts off 4.1 cents at $4.72 an ounce.
On other commodity markets, grain and soybean futures were widely mixed, orange juice futures fell sharply and livestock and meat futures were mostly higher.
Market Roundup, D8
