Dow Drifts, Manages a Gain of 6.68
Blue chip stocks drifted and closed with modest gains today, with the market hovering just above its lowest levels in a year and a half.
The Dow Jones average of 30 industrials edged up 6.68 to 2,387.87.
Declining issues outnumbered advances by about 5 to 4 on the New York Stock Exchange, with 658 up, 832 down and 475 unchanged.
Big Board volume totaled 161.26 million shares, against 149.57 million in the previous session.
The NYSE’s composite index slipped .05 to 163.59.
Analysts said investors were still preoccupied with trying to gauge how far and how deep the recession that is now presumed to be taking hold in the economy might go.
With a decline of more than 20% since midsummer, stock prices are widely believed to have anticipated the effects of at least a brief, shallow slump in business activity.
But many observers say they are not convinced the market has fully taken into account whatever possibility exists of a severer, longer-lasting downturn.
Traders said the market also remained concerned about the Persian Gulf crisis as well as the drawn-out federal budget affair and poor corporate earnings.
Citicorp led the active list, down 1/4 at 12 3/4. On Tuesday the company reported a 38% earnings decline for the third quarter.
MCI Communications, the volume leader in the over-the-counter market, dropped 3/4 to 30. The company reported a 69-cents-a-share third-quarter loss, after a large one-time writeoff.
The Dow had been up 23.27 points at 1 p.m.
“Everyone’s surprised the market’s up,” said Ken Ducey, senior vice president at S.G. Warburg.
Traders said that investors were looking for bargains after Tuesday’s 35-point fall and that relatively strong technology stocks such as International Business Machines Corp. and Honeywell Inc. were helping to boost stocks overall.
“We’ve got some relative strength in isolated areas,” said Thomas Walsh, head of the trading desk at Nikko Securities.
Investors were also urged on by falling oil prices, a key market-mover since Iraq invaded Kuwait Aug. 2.
Crude oil for November delivery was down 74 cents to $38.15 a barrel on the New York Mercantile Exchange. This was also a reversal from the previous session, when oil rose 94 cents a barrel.
