STOCKS : Dow Slips 8.05 as Investors Await Earnings
The stock market drifted lower in light trading Wednesday as investors awaited word of quarterly corporate earnings.
The Dow Jones average of 30 industrials, up 18.56 on Tuesday, slipped back 8.05 points to 3,021.02. Declining issues outnumbered advances by about 9 to 8 on the New York Stock Exchange.
Big Board volume came to an estimated 153.91 million shares against 171.45 million at the same point Tuesday.
Smaller issues showed more luster as they inched ahead to a new record close. The NASDAQ composite index, which has hit a string of new highs recently, ended at a record 527.82, up 1.35 points. Its previous record was 527.19 on Sept. 20.
Blue chip investors were reluctant to move aggressively into the market.
“It’s turned into a waiting game to see if the Fed will lower rates (further) and for clarification on third-quarter earnings,” said Peter Davies, a vice president at Nomura Securities.
Events in Iraq lurked in the background, but Middle East tensions did not affect trading directly. “They are a bit unsettling,” said Jack Shaughnessy, director of research at Advest Inc.
Among the market highlights:
* Upjohn Co. rose 3 1/4 to 47 1/2 on recurring speculation that the drug company may be a target of a takeover by a foreign investor.
* Oracle Systems, the computer software company, jumped 2 1/8 to 13 5/8 after it reported stronger-than-expected first-quarter results.
* Time Warner gained 1 3/8 to 82 5/8 after its chairman said he is hopeful that the company will complete a deal on a strategic alliance by the end of 1991.
* Immunex Corp. jumped 4 3/4 to 51. Merrill Lynch repeated a strong buy on it. A regulatory filing by rival Genetics Institute indicated that the U.S. Patent Office may have ruled out any patent dispute on a drug Immunex sells.
* General Dynamics gained 3 7/8 to 49 1/2, trading at its highest levels since 1989. The company said it expects its third-quarter earnings to be “somewhat better” than analysts’ forecast.
* Union Carbide, which said it planned to reduce its work force by about 5,500 as part of a cost-cutting campaign, rose 1/2 to 22 3/8.
* Losers among the blue chips included Merck, down 1 3/8 at 129 7/8; IBM, down 7/8 at 105; General Electric, down 1 at 68 7/8; Philip Morris, down 3/8 at 71 7/8, and AT&T;, down 3/8 at 37 7/8.
Retailing stocks were mostly lower amid worries about prospects for consumer spending as the industry approaches its pivotal fall and Christmas selling season.
* Wal-Mart Stores dropped 1 5/8 to 47 7/8; Gap Inc. 1/2 to 44 5/8; Limited Inc. 1/8 to 25 3/4; Woolworth 3/4 to 28 3/8; Kmart 1/4 to 41 3/4, and J.C. Penney 3/8 to 49 7/8.
In foreign trading, Tokyo’s key 225-share Nikkei average was up 243.72 points or 1.04% at 23,577.42.
London shares closed just below the day’s high. The Financial Times-Stock Exchange average of 100 leading shares was up 21.2 points to 2,597.8.
German stocks lost early gains, and Frankfurt’s 30-share DAX average settled down 1.22 at 1,625.41.
Credit
Bond prices closed slightly lower in light trading, largely unmoved by a round of new reports that suggested economic growth is extremely weak.
The price of the Treasury’s bellwether 30-year bond fell 5/32 point, or $1.56 per $1,000 in face amount, at closing. Its yield was 7.90%, up from 7.88% late Tuesday.
Bond analysts said the latest reports on housing sales and orders for factory goods reflected what many knew in the first place: The economy is moving out the recession, but very slowly.
The Commerce Department reported that August orders for durable goods fell 3.8% to a seasonally adjusted $125.9 billion, from $130.8 billion in July.
The National Assn. of Realtors reported a 2.1% decline in new home sales last month. One analystsaid bonds didn’t react strongly to the report, but said the decline could be important if it persists.
Bond prices generally rise and yields fall on reports of a poor economy as analysts anticipate further cuts in interest rates, which boosts the value of fixed-income securities.
The federal funds rate, the interest on overnight loans between banks, was quoted at 5.313%, up from 5.25% late Tuesday.
Currency
The dollar fell in quiet domestic trading after posting gains overseas.
Analysts attributed some dollar selling to an Iraqi promise to allow unimpeded helicopter flights by United Nations nuclear inspection teams. The move by the Baghdad government helped ease some trader concerns about a possible renewal of conflict in the Middle East.
The dollar, which is seen as a safe currency in times of international turmoil, had gained over the past week from Iraq’s refusal to allow inspections of its suspected nuclear sites and President Bush’s threat to escort the U.N. flights with American warplanes.
Bush put that threat on hold Wednesday.
Analysts said the dollar was unaffected by the durable goods report.
The dollar closed in New York at 1.681 German marks, down from 1.687 marks Tuesday and at 133.22 Japanese yen against 133.45 yen Tuesday.
Commodities
Copper futures prices jumped to a new five-month high on New York’s Commodity Exchange amid reports that violence in Zaire had spread to the copper-rich southern tip of the central African nation.
On other commodity markets, precious metals retreated; oil futures were mixed; grains and soybeans were mixed, and livestock and meat futures were mixed.
Copper for delivery in September climbed 2.85 cents to $1.1025 a pound, the highest settlement of a near-term copper contract since April 18. Other copper contracts finished 1.75 cents to 2.65 cents higher.
The chief market influence was the escalating unrest in Zaire, the world’s fourth-largest copper exporter, where at least 30 people reportedly were killed this week in rioting and looting by mutinous Zairean soldiers.
The rioters aim to unseat Zaire’s ruler of 26 years, Mobuto Sese Seko.
Gold for September delivery fell 90 cents to $352.80 an ounce on the Commodity Exchange. September silver dropped 3.3 cents to $4.217 an ounce.
Crude oil ended nearly unchanged on the New York Mercantile Exchange. Light, sweet crude oil for delivery in November rose 2 cents to $22.21 a barrel.
Market Roundup, D10
