War Fears Shake Dow but Loss Is Held to 17 : Wall Street: Down more than 54 points during the session, index trims decline after peace feeler.
Prices were down but recovered in late trading on Wall Street today as the stock market grew hopeful that a war in the Persian Gulf might be averted before Tuesday’s deadline.
The Dow Jones industrial average closed down 17.58 points at 2,483.81 after having been down more than 54 points during the session. New York Stock Exchange volume was modest at 120.83 million shares, with losers outnumbering gainers by a 3-1 margin.
A Cable News Network report in the last half hour of trading saying that Iraq would be willing to withdraw from Kuwait but not under the dictates of the U.N. deadline triggered a powerful but brief rally.
Most traders, having already adjusted their positions, were on the sidelines as Tuesday’s deadline for Iraq to pull out of neighboring Kuwait approached.
The few traders who were in the market were selling in anticipation of war breaking out in the Persian Gulf, analysts said.
“We’re close to the deadline and everyone has kind of given up hope for peace,” said Hildegarde Zagorski, a market analyst at Prudential-Bache Securities Inc. “They’re afraid that if wear breaks out the market will take a big hit.”
Michael Metz, an analyst with Oppenheimer & Co., said there were few buyers today. However, he added, “There’s no heavy liquidation pressure.”
Wall Street’s losses today followed similar declines overseas.
In Tokyo, the Nikkei Stock Average of 225 selected issues fell 27.79 points to close at 23,213.23. In London, the broad-based Financial Times-Stock Exchange 100-share index was down 25.6 points at 2,080.5 by midday.
Occidental Petroleum, which led the NYSE most active list, was up 1/8 to 17 1/2. The company announced today it would take a $2-billion fourth-quarter charge for a restructuring that includes $3 billion in asset sales.
Among actively traded blue chips, IBM was down 2 1/2 to 105 5/8; General Electric was down 1/2 to 53 1/2; and AT&T; was down 5/8 to 29 1/8.
Bond prices fell in early trading today as investors reacted to grim pronouncements from U.N. Secretary General Javier Perez de Cuellar about chances for a peaceful resolution of the Persian Gulf crisis.
The Treasury’s bellwether 30-year bond fell 11/16 point, or $6.88 per $1,000 in face amount, around midday. Its yield, which moves in the opposite direction of price, was 8.42%, up from 8.36% late Friday.
But prices of shorter-term securities were down only slightly as investors pulled their money out of risky investments and placed it with the safer government securities market, said Raymond Dalio, president of Bridgewater Associates Inc. in Wilton, Conn.
“There’s a movement to safety,” Dalio said. “What you’re seeing here is a reaction to fear.”
Trading volume was light as investors remained on the sidelines until developments unfolded, said Dalio.
“It’s one of those things where you see people taking money off the table because it is not the normal type of game they’re used to playing,” Dalio said.
