FINANCIAL MARKETS : Dow Dips 1.57 on Economic News : Market Overview
* Stocks ended mixed after a late burst of computer-driven selling erased gains made earlier in the day. The Dow Jones industrial average eased 1.57 points to 3,259.39.
* Bond yields were little changed in the wake of conflicting economic reports and a strong Treasury auction of new five-year notes.
Stocks
The Dow vacillated much of the day, only to drop by a brisk 15 points in the final 10 minutes. Traders attributed the sudden fall to heavy computerized program selling.
Reports circulated that Salomon Bros. was one of the suspects in the selling spree. Salomon, chastened by its Treasury bond scandal, quickly issued a statement saying that it “made an error today in executing a customer’s program order.” The firm said it will repair the damage in coming days through other trades.
In the broader market, declining issues outnumbered advances by about 8 to 7 on the New York Stock Exchange, where volume totaled 192.08 million shares versus 191.58 million Tuesday.
Some analysts said the market was somewhat paralyzed by the day’s economic news.
The Commerce Department said orders for durable goods fell slightly in February. But existing-home sales rose a sharp 9.3% for the month. The reports suggested that the nation’s housing industry was recovering, but the manufacturing sector remained sluggish.
“This is a market which has no real impetus to do anything,” said analyst Michael Metz at Oppenheimer & Co. “There are renewed reservations about the economic outlook. There is no reason to do anything here.”
Robert Walberg, market analyst at MMS International, noted: “Although the economy may be moving at a more sluggish pace than expected, it is still recovering.”
Among the market highlights:
* Metals stocks were strong. The durable goods report showed a surge in orders for basic metals. Alcoa jumped 1 3/8 to 72 1/2, copper producer Phelps Dodge gained 1 1/4 to 85 3/8, and Amax added 1/8 to 18 3/4.
* Auto stocks stabilized after Tuesday’s disappointing report on mid-March auto sales. GM added 1/4 to 37 5/8, and Chrysler gained 3/8 to 17 3/4. But auto parts firm Eaton tumbled 3 5/8 to 74 3/4.
* AT&T; jumped 1 1/8 to 40 3/4, nearing its 52-week high of 41 3/8. PaineWebber analyst Jack Grubman repeated a buy recommendation on the stock.
* Federated Department Stores leaped 1 3/4 to 15 3/4. A County Natwest analyst recommended the retailer.
* Disney gained 1 5/8 to 149 1/2 after brokerages Dean Witter and Wertheim Schroder reiterated that the stock looks attractive, based on expected 1992 performance of its film and theme park divisions.
* Waste Management plunged 2 1/8 to 38 3/4. The company said it didn’t know why the stock was hit. Garbage stocks in general have been weak lately.
* Among new issues, Coltec Industries went public at 15 and closed at 18 on the NYSE. The company--known as Colt Industries when it was mostly a gun maker--now is a $1.4-billion supplier to aerospace, automotive and other industrial markets.
* Oracle Systems, which markets database management software, lost 2 1/4 to 15 in active trading after an analyst removed a buy recommendation. Microsoft is planning a major push in that market.
* L.A.-based finance company Foothill Group added 1/8 to 8 1/2. The company said it plans to sell 3 million new shares. There are 10 million outstanding now.
Overseas, stocks staged a technical rebound in Tokyo. The Nikkei average moved back above 20,000, rising 335.21 points to 20,226.78.
In London, the Financial Times 100-share average finished up 6.2 points at 2,464.9.
In Frankfurt, shares languished around the levels of the last two days. The DAX average inched up 3.15 points to 1,716.26.
Credit
The price of the Treasury’s bellwether 30-year bond gained 1/32 point, or 31 cents per $1,000. Its yield was unchanged at 7.94%.
Marilyn C. Schaja, a money market economist with Donaldson, Lufkin & Jenrette Securities, said bond yields fell after the government reported the weaker-than-expected durable goods statistics.
But yields inched higher later on the strong recovery in February existing-home sales.
Traders said the Treasury’s auction of $10.29 billion in five-year notes went smoothly, showing healthy demand from investors. The notes were sold at an average yield of 6.94%.
Bond yields jumped in February on signs of recovery. But lately, weakness in some economic reports has forced bond traders to rethink the idea that interest rates must head sharply higher soon.
The federal funds rate, the interest on overnight loans between banks, was 4.00%, up from 3.75% Tuesday.
Currency
The dollar was mixed against major foreign currencies after the durable goods and home-sales reports furnished a murky picture of U.S. economic conditions.
The dollar finished in New York at 1.652 German marks, down from 1.664 marks Tuesday. Against the Japanese yen, the dollar ended unchanged at 133.45.
Commodities
Coffee traders developed a bad case of the jitters and sent futures prices into a sharp decline on the Coffee, Sugar & Cocoa Exchange in New York.
Coffee for delivery in May plunged 3 cents to settle at 70.85 cents a pound.
Meanwhile, the durable goods report sent gold futures prices higher on the Commodity Exchange in New York. April gold was up $1.50 to $341.30 an ounce; March silver was 0.4 cent lower at $4.08 an ounce.
Market Roundup, D8
