Dow Declines 24.60 on Weak Economic News : Market Overview

Highlights of Thursday’s market activity, compiled from Times staff and wire reports:

* Unexpectedly weak economic data pushed stocks into a broad retreat. The Dow Jones industrials dropped 24.60 points to 3,016.32, extending the loss since the start of the week to 60.83 points.

* Treasury bond yields fell on renewed expectations that the Federal Reserve will move to ease interest rates.

Stocks

Declining issues outnumbered gainers by more than 2 to 1 on the New York Stock Exchange, as many investors bailed out. But Big Board volume slowed to 179.04 million shares, against 187.48 million Wednesday.

Some investors clearly seemed spooked by a Commerce Department report showing that orders for durable goods fell a worse-than-expected 3.2% in September.

“The market is starved for good news on the economy,” said Alfred Goldman, director of market analysis at A. G. Edwards.

However, if volatile swings in orders for defense and transportation goods are excluded, orders for many categories of goods rose in September. The market seemed to recognize that: Stocks that would most likely have sold off on a truly negative durable-goods report--industrial companies--did not drop significantly.

Analysts said the real reason for the market’s selloff this week may simply be a binge of profit taking in some of the stocks that have performed best this year.

That profit taking could accelerate in November. But by then many analysts believe that the Federal Reserve will have again cut interest rates to help the economy.

Among Thursday’s highlights:

* Some of the recently hot stocks hit by profit taking included comic-book publisher Marvel Entertainment, down 6 1/8 to 35 3/4; 50-Off Stores, down 3 to 24; drug firm Carter Wallace, down 3 3/8 to 103 7/8, and banking firm J. P. Morgan, which dropped 1 3/8 to 61 1/4.

* Biotech stocks, many of which had plunged Wednesday after astronomical gains this year, plummeted again. Anergen sank 5 3/4 to 15 1/4 after recently hitting a high of 31 1/2. Immune Response dropped 3 3/4 to 42 5/8 after recently trading as high as 50 3/4. Other losers included Biogen, off 2 to 41 1/4; Amgen, off 1 7/8 to 61 1/8, and Genzyme, down 2 3/4 to 46 1/4.

* Another recent market leader, Harley-Davidson, collapsed despite reporting better earnings. The results weren’t as good as Wall Street expected, largely because of weakness in the firm’s recreational-vehicle line. Harley tumbled 11 1/2 to 40 3/4. Another RV maker, Riverside-based Fleetwood Enterprises, fell 2 1/8 to 33.

* Among Southland companies reporting earnings, Computer Sciences added 1/8 to 66 3/4 on a flat earnings report, while Tekelec rose 3/8 to 17 3/4 on its report, also flat with a year ago. Logicon lost 3/4 to 37 3/4 despite a much higher report.

Also, computer maker Teradata lost 1 3/8 to 21. After the close, it reported improved earnings from a year ago but also said it may offer $60 million in new stock.

* Dole Food soared 2 3/8 to 37 3/4 on bargain hunting and short-covering after its recent fall from 41 on disappointing earnings.

* Community Psychiatric jumped 1 1/4 to 14 1/8. First Boston upgraded the stock to buy from hold. The price has plunged in recent weeks.

Overseas, Wall Street’s slide pushed London share prices down. The Financial Times 100-share average fell 32.8 points to 2,528.3. In Frankfurt, the DAX average fell 8.88 points to 1,579.01.

Tokyo stocks recouped two days of losses to close moderately higher. The Nikkei average rose 149.32 points to 24,949.26.

Credit

The Treasury’s 30-year bond, which gained 1/4 point Wednesday, was up another 9/16 point, or about $5.63 per $1,000. Its yield sank to 8.03% from 8.07%.

Analysts said rates fell after a government report showed that initial claims for unemployment insurance rose a larger-than-expected 29,000 during the week ended Oct. 12. The weak durable-goods report also helped bring buyers back to bonds.

The data increased concerns that the fragile recovery could be in danger of stalling. Thus, investors once again believe that the Federal Reserve will move soon to ease interest rates to help stimulate economic growth.

Bonds were also helped by news that Rep. Dan Rostenkowski (D.-Ill.), the House’s chief tax writer, was reluctant to push a tax-cut bill. Some bond investors fear that a tax cut would be inflationary, but others say the economy is weak enough to merit a tax cut and another Fed rate cut.

The federal funds rate, the interest banks charge each other for overnight loans, was 5.188%, up from Wednesday’s 5.125%.

Currency

The dollar closed lower after the release of the weak economic data.

In New York, the dollar closed at 1.699 German marks, down from Wednesday’s 1.711. It ended at 131.15 Japanese yen, versus 131.65.

Other rates in New York, compared to Wednesday, included 1.488 Swiss francs, down from 1.497; 5.799 French francs, down from 5.837; 1,270.50 Italian lire, down from 1,279.00; and 1.126 Canadian dollars, down from 1.128.

Commodities

Energy futures prices rebounded in active trading on the New York Mercantile Exchange to recover some of the losses posted the previous session.

Light, sweet crude oil for December delivery, which lost 39 cents Wednesday, rose 23 cents to $23.49 per barrel.

On New York’s Commodity Exchange, October gold ended 0.20 cent lower at $362.10 an ounce, while December silver rose 1.8 cents to $4.133 an ounce.