STOCKS : Dow Off 9.17 as Traders Await Jobless Report
Wall Street stocks posted declines for the fourth straight session Wednesday, but trading was tentative ahead of a key economic report expected Friday.
The Dow Jones average of 30 blue chips, up about 5 points briefly in the early going, closed with a 9.17-point loss at 3,008.50.
In the four trading days since it hit a record closing high of 3,055.23 on Aug. 28, the average has fallen 46.73 points.
Declining issues outnumbered advances 1,016 to 554 on the New York Stock Exchange.
Big Board volume came to 157.52 million shares, compared to Tuesday’s 153.71 million.
“It’s very quiet. I think the market is just looking for direction,” said Jeffrey Kaminsky, director of institutional sales at Mabon Securities. “We’re waiting for confirmation of a better economy.”
Many investors were awaiting Friday’s report on unemployment, the government’s first indication of how the economy performed last month.
Further disclosures from Salomon Bros. about its misconduct at U.S. Treasury bond auctions earlier this year did little to encourage buying, traders said.
“I think that caused some negative feeling,” said Paul Hennessey, a vice president at Boston Co.
The next focus could be the August employment report. Economists expect the jobless rate to rise to 6.9% from 6.8%, and they anticipate non-farm payrolls will rise slightly after falling in July.
“The market has little reason or incentive to go ahead,” one analyst said. “We saw a little bit of a top last week and this is a near-term correction.”
Computer-driven selling programs pushed the market lower, traders said.
A weak bond market also undermined stocks.
Among the market highlights:
* Browning-Ferris continued to slip a day after it disclosed that fourth-quarter and full-year earnings would be below analysts’ expectations. It lost 1 1/4 to 20 1/2.
* Boeing gained 7/8 to 50 1/2. The Cowen brokerage raised its rating on the company to “buy” from “hold” on improved prospects for continued earnings growth.
* Goodyear Tire rose 2 3/8 to 40 7/8. Merrill Lynch upgraded its rating, and Salomon Bros. initiated coverage of the firm with an “outperform” rating.
* Centocor shares jumped 3 to 40 1/2. A Food and Drug Administration panel said it backs Centocor’s Centoxin drug for bacterial infections. Xoma lost 5 to 15 1/2 after the panel delayed review of its competing E5 drug.
* Union Pacific gained 2 3/8 to 89 after the railroad and transportation company said it will take a $575-million charge against third-quarter earnings, mostly for cost-cutting actions.
* Losers among the blue chips included Westinghouse Electric, down 3/4 at 22 1/2; Merck, down 3/4 at 125 3/4; McDonald’s, down 3/4 at 31 3/4; Coca-Cola, down 3/4 at 64 1/4, and General Electric, down 1/2 at 73 5/8.
* Campbell Soup fell 2 3/4 to 82. The company’s fourth-quarter earnings, at 67 cents a share, came in a shade below some analysts’ estimates.
Overseas stocks closed generally lower. German shares ended a slow session lower with the 30-share Dax average in Frankfurt closing down 7.73 points to 1,647.91. Stocks fell in Tokyo in quiet trading. The 225-share Nikkei average dropped 67.11 points to 22,402.69. London’s Financial Times 100-share index dropped 4.4 points to 2,664.6.
Credit
Bond prices sagged lower in narrow trading as bond dealers also awaited release of the August employment figures later this week, a report regarded as a key indicator of the economy’s direction.
The Treasury’s bellwether 30-year bond fell 3/16 point, or about $1.88 cents per $1,000 in face amount, at closing. Its yield rose to 8.06%, up from 8.04% late Tuesday.
There were no fresh economic reports released during session and the market remained stagnant, said Marilyn Cohen, investment broker for the California-based Capital Insight Inc.
The federal funds rate, the interest on overnight loans between banks, was quoted at 5.50%, down from 5.813% late Tuesday.
Currency
The dollar closed unchanged to lower in an uneventful foreign exchange session.
In New York, the dollar closed at 1.737 German marks, unchanged from Tuesday, and it finished at 135.50 Japanese yen, down from 135.80 on Tuesday.
Though several recent reports have pointed to growth in the economy, currency traders said the market appeared to be concerned that Friday’s the jobless data will be weak. That could prompt the Federal Reserve to ease interest rates, which could undermine the value of the dollar relative to other currencies.
Other late New York dollar quotes, compared to Tuesday’s prices, included: 1.5240 Swiss francs, up from 1.523; 5.900 French francs, down from 5.901; 1,295.00 Italian lire, down from 1,295.75, and 1.142 Canadian dollars, up from 1.1415.
Commodities
Cocoa futures surged upward for the third consecutive session amid concerns about the West African cocoa crop.
On other markets, livestock and meat futures were mostly higher, grains and precious metals were mixed, and energy futures were mostly lower.
While Wednesday’s $62-a-ton increase in cocoa futures was attributed to technical factors, it continues a recovery from 18-year lows set earlier this summer in a market smothered with oversupply.
“Basically, there’s a concern that the crops in West Africa and Brazil are not going to be anywhere as big as last year,” said Harri Schwartz, an analyst in New York with Cargill Investor Services Inc.
The cocoa contract for delivery in December surged ahead by $62 on New York’s Coffee, Sugar & Cocoa Exchange, settling at $1,190 a ton.
Energy futures were mostly lower, reflecting a selloff in heating oil contracts at the New York Mercantile Exchange. Light, sweet crude oil lost 43 cents on the October contract, which settled at $21.81 a barrel.
Precious metals futures were mixed at New York’s Commodity Exchange. Gold for delivery in October was 10 cents higher at $349.80 an ounce; September silver was 0.1 cent lower at $3.904 an ounce.
Market Roundup, D8
