Dow Starts Off New Year With Hangover, Slides 23

Wall Street stocks began the year on a depressed note today, with the Dow Jones industrial average down about 23 points at the close.

Traders said that volume was light, and noted that the market could not rise despite news that pointed to lower interest rates.

The Dow Jones industrial average closed down 23.02 at 2,610.64. Volume on the New York Stock Exchange was 126.28 million shares, with declining issues beating gainers by a 9-7 margin.

Traders said that most of the decline was due to a late burst of computerized program trading. The market ignored a cut in the prime lending rate by major banks. Lower interest rates typically stimulate business activity and boost stock and bond prices.

Analysts said investors began 1991 in a mood of widespread uncertainty about the prospective length and depth of the slump in business activity.

A survey of corporate purchasing executives, the results of which were made public this morning, showed more evidence of economic weakness in December.

The purchasing managers’ production index fell last month to its lowest levels since the depths of the nation’s last clearly defined recession, in November of 1982.

Many Wall Streeters question whether the 1990 decline in stock prices was severe enough to take into account the possibility of a protracted recession.

Among the blue chips, Sears Roebuck rose 5/8 to 26 an hour before the close; Philip Morris fell 3/4 to 51; Exxon dropped 5/8 to 51 1/8, and General Electric was down 5/8 at 56 3/4.

Toys R Us climbed 5/8 to 23 1/8. The retailer posted a 7.7% sales increase for the eight-week Christmas selling season through Dec. 24, although same-store sales at outlets open for a year or more dropped 6%.

The approach of the Jan. 15 U.N. deadline for Iraq to withdraw from Kuwait was making market participants wary, one analyst said.