STOCKS : Dow Off 12.13; Trading Pace Hits 4-Year Low
Stock prices fell Friday in the lightest trading in almost four years because of the Thanksgiving holiday and a power outage that halted trading for nearly two hours on the New York Stock Exchange.
The Dow Jones industrial index closed down 12.13 points at 2,527.23. For the week, the Dow fell 23.02. In the broader market, losing issues edged gainers 678 to 644.
The long Thanksgiving holiday weekend minimized trading on the Big Board, where only 63.4 million shares changed hands.
The shutdown at the exchange because of a power problem early in the session also curtailed volume and killed any early enthusiasm, traders said.
The last time fewer shares changed hands on the Big Board was Dec. 26, 1986, when volume was 48.9 million shares.
A sharp rise in the oil market and weaker bond prices also left stock investors wary.
Stocks had been expected to move higher Friday, in keeping with a post-holiday tradition.
Among the highlights:
* MCA Inc. was the most active issue, losing 3 1/8 to 65 3/8 after sources said Matsushita Electric was looking to pay less than expected for the entertainment concern. Industry sources said Matsushita was discussing a price between $70 and $75 a share, while Wall Street had been looking for a transaction valued at $75 to $80 a share.
* Energy stocks managed only a mixed showing despite the jump in oil prices. Exxon rose 3/8 to 51 1/8 and Texaco gained 1/8 to 57 1/8, but Chevron dropped 1/4 to 68 1/2 and Atlantic Richfield was down 7/8 at 125.
* British companies traded on U.S. markets moved higher in line with gains in the London stock market. British Gas rose 2 5/8 to 47 3/8 and British Telecom gained 1 5/18 to 57 1/8.
In London, shares roared higher on hopes that Britain had entered a new political era after the resignation of Prime Minister Margaret Thatcher, with the market anticipating a long honeymoon under a new Conservative party leader. The Financial Times 100-share index surged 42.6 points to 2,170.5, a rise of 2%. This marked a gain of 102.5 points, or nearly 5%, for the week as a whole.
In Frankfurt, German share prices slipped as the Deutsche Terminboerse’s new DAX futures contracts saw a relatively slow first day’s trading in low volume. The underlying 30-share index fell 12.74 points to 1,483.36, but was more than 57 points higher for the week.
The Tokyo market was closed Friday for the Labor Thanksgiving Day holiday.
CREDIT: Bond Prices Slip in Quiet Session Bond prices edged lower in light trading in another shortened session.
The Treasury’s bellwether 30-year bond lost 1/4 point, or $2.50 per $1,000 in face amount. Its yield, which rises when prices fall, edged up to 8.44% from 8.42% on Wednesday.
Bond trading ended about two hours early on Wednesday in advance the Thanksgiving holiday which closed the markets all day on Thursday. Trading wound down early again on Friday as many traders took a four-day weekend.
Prices were pressured by increases in the energy futures markets, where light sweet crude oil for December delivery was up about $2 a barrel at $31.75 shortly after 2 p.m. EST when bond trading closed.
Bond prices are hurt by rising oil prices or other signs of inflation.
The federal funds rate, the interest on overnight loans between banks, traded at 7.5%, the same as late Wednesday.
CURRENCY: Dollar Edges Up Despite Oil News The dollar was mostly higher against major foreign currencies Friday in extremely thin post-holiday trading. Analysts said traders largely ignored a rise in oil prices and intensified fear of war in the Persian Gulf.
Heightening concerns about an armed confrontation in the Middle East, President Bush declared Friday that “the world is getting tired” of Iraq’s continuing occupation of Kuwait and said he was closing in on agreement for a U.N. resolution authorizing the use of force in the Persian Gulf.
Traders speculated that senior-level currency investors who ordinarily would have responded to such news had taken the day off for a four-day weekend. Talk of war generally nudges up the value of the dollar, which is usually viewed as relatively safe-haven investment.
The dollar lost a bit of ground against the Japanese yen in New York, closing at 127.10 yen, down from Wednesday’s 127.17.
In New York, one British pound cost $1.9668, less expensive than Wednesday’s $1.9670. In London, the pound fell to $1.9670 from $1.9700 late Thursday.
Other late dollar rates in New York, compared to Wednesday’s late rates, included: 1.4860 German marks, up from 1.4770; 1.2600 Swiss francs, up from 1.2472; 5.0115 French francs, up from 4.9800; 1,115.50 Italian lire, up from 1,109.00, and 1.1602 Canadian dollars, up from 1.1582.
COMMODITIES: Gold Gains on Talk of War in Mideast Gold prices rose sharply on strength in the oil markets and talk of Middle East war.
The precious metal jumped $4.80 an ounce to $383.70 on the New York Commodity Exchange. Republic National Bank later quoted a bid of $383.75, up $4.60.
Silver was 0.5 cent to 0.8 cent higher, with December at $4.13 an ounce.
Platinum futures advanced sharply on the New York Mercantile Exchange upon word of South African mine layoffs following months of labor strife.
Platinum gained $13.70 to $14.10, with January at $429.70 an ounce.
Soybean futures prices advanced at the Chicago Board of Trade as a team of Soviet grain buyers prepared to come to this country next week.
On other markets, petroleum futures were sharply higher, cattle advanced and pork futures were mostly lower.
Renewed hopes of an emergency food deal with the Soviet Union and a report that Brazil had reduced its planting by 15% gave soybean futures enough of a jolt to send prices up by more than 11 cents a bushel in early trading.
“There seems to be a consensus in the market that eventually the Soviets and the U.S. will come to terms” on emergency aid, said Joel Karlin, a grain analyst in Chicago with Research Department Inc.
The Soviet team reportedly will be discussing export credits and their country’s long-term grain agreement with the United States.
