STOCKS : Dow Off 10.64; Profit Takers Nip Early Rally
Blue chip stock prices fell Tuesday as traders took profits and computer-driven selling programs kicked in after sharp rises earlier in the day and on Monday.
The Dow Jones industrial index fell 10.64 points to 2,505.20, after soaring 63.36 points Monday.
But most broader indexes rose slightly, and advancing issues outnumbered declines 1,014 to 582 on the New York Stock Exchange. Big Board volume was a relatively heavy 188.32 million shares, compared to 202.21 million Monday.
A morning rise on Wall Street was fed by lower oil prices and a 13% surge on the Tokyo stock market. The Dow was up as much as 30 points as crude oil for November delivery fell $3 a barrel.
But selling kicked stocks lower later, as worries about the financial system once again rattled the market. Traders also were generally wary of the budget deal cut by the White House and congressional leaders. A number of congressmen have voiced loud opposition to the proposal to cut the federal deficit by $500 billion over five years.
Among the market highlights:
* Primerica dropped 1 1/4 to 18 1/2 after trading as low as 16 7/8. The financial services company was hit by new rumors of credit problems, though it said all of its key units would post healthy third-quarter earnings.
Financial worries also pummeled Unisys shares. The troubled stock plunged 1 1/8 to 3 7/8 after analysts expressed disappointment with the firm’s announcement of a new computer systems strategy. Later, Moody’s downgraded Unisys’ debt.
* Drug and food stocks, which led Monday’s rally, were mixed. Bristol Myers lost 1/2 to 60 1/4 and Merck fell 1 to 79 1/4, while Kellogg gained 1 to 66 1/4 and Quaker Oats slipped 5/8 to 45 1/8.
* Some industrial stocks caught buyers’ interest, despite continued recession fears. Monsanto rose 1 5/8 to 42 5/8, Tenneco gained 1 1/2 to 49 5/8 and Nucor jumped 1 3/4 to 60 1/2.
* Polaroid rose 2 5/8 to 33 1/8. The company declined comment on its stock activity. However, it said no decision had been reached in the patent infringement case between itself and Eastman Kodak. Kodak fell 1 5/8 to 38.
* Some high-tech stocks were hard hit by analyst downgrades. Autodesk lost 4 3/4 to 39 3/4, Software Toolworks plunged 2 7/8 to 4 3/8, and Sun Microsystems dropped 1 3/4 to 22 1/4.
* Some recent laggards attracted buyers. Times Mirror jumped 2 1/8 to 25 3/4, Carter Hawley gained 3/8 to 3 3/8, J.C. Penney added 1 5/8 to 45 and Time Warner rose 1 3/8 to 73 7/8.
CREDIT
Bond Prices Jump as Oil Costs Drop Anti-inflationary signals from a sharp drop in oil prices boosted government bond prices in light trading.
The 30-year Treasury bond gained 7/32 point, or $2.19 for every $1,000 in face amount, after surging more than $10 on Monday. Its yield edged down to 8.82% from 8.84% Monday.
But there was still no sign from the Federal Reserve that it is prepared to lower interest rates to help prop up the economy. Traders have been expecting relief in the wake of the White House budget-cutting deal with congressional negotiators.
The federal funds rate, the interest banks charge one another for overnight loans, was quoted at 8.25%, unchanged from Monday.
CURRENCY
Dollar Falls in U.S. After Rise in Europe The dollar dropped against all major currencies in uneventful U.S. trading after gaining overseas.
The dollar finished at 1.549 German marks, down from Monday’s close of 1.557, and at 136.72 Japanese yen, down from 136.75.
COMMODITIES
Gold, Silver and Platinum Head Up Precious metals posted an impressive turnaround from weeks of sharp losses amid gains on the Japanese stock market and improved confidence in the U.S. economy.
On other commodity markets, grains and soybeans were higher; cattle futures were lower and pork futures were sharply higher.
October gold rose $2.50 to $389.10 an ounce on the Comex. Silver settled 3.9 cents higher at $4.68 an ounce for October.
Platinum on the New York Mercantile Exchange settled $16.80 to $17.20 higher.
