Gulf Gloom Pushes Dow Down 37.62
An afternoon wave of selling drove stock prices lower today, leaving the market at its lowest levels since the spring of 1989 as gloom over the Persian Gulf crisis cast its pall.
The Dow Jones average of 30 industrials fell 37.62 to 2,407.92, its lowest close since it stood at 2,382.88 on May 11 of last year.
Declining issues outnumbered advances by about 7 to 2 on the New York Stock Exchange, with 351 up, 1,207 down and 422 unchanged.
Big Board volume totaled 167.89 million shares, against 145.61 million in the previous session.
The NYSE’s composite index dropped 2.44 to 164.97.
Analysts said rumors of increasing tensions in the Persian Gulf caused some fresh problems for the market.
The atmosphere was already gloomy, they noted, following Tuesday’s upsurge in oil prices to above $40 a barrel.
Today crude-oil futures for November delivery pushed past $41 a barrel in early trading on the New York Mercantile Exchange, then dropped back to less than $39.
Recession worries have intensified of late as analysts continue to cut their earnings estimates for a wide range of companies. Profit reports for the third quarter of the year will reach flood stage over the next couple of weeks and many are expected to be weak.
Traders also cited a growing belief that the economy is in a recession.
Motorola rose 1 5/8 to 54 3/8 in active trading after taking a 7-point drop Tuesday, when the company posted a quarterly earnings gain that fell short of expectations.
Losers among the blue-chip industrials included Aluminum Co. of America, down 3 1/8 at 56 5/8; American Telephone & Telegraph, down 1/2 at 31 1/2; General Electric, down 1/2 at 52 3/8, and Mobil, down 3/4 at 58 3/4.
Bond prices fell in early trading today.
The Treasury’s benchmark 30-year bond, which plunged nearly $18 per $1,000 in face amount Tuesday over the same fears, fell another $3.75 this morning. Its yield, which rises when prices fall, rose to 8.99% from 8.96% late Tuesday.
