FINANCIAL MARKETS : Dow Dips Amid Russian Crisis; Yields Mixed
Market Overview
The stock market ended mixed in subdued trading Monday, as the Russian crisis eased and investors turned their attentions to corporate earnings.
Bond yields were mixed, with long-term interest rates edging higher as short-term rates dipped in light, uneventful trading.
The dollar and gold prices both finished lower.
Stocks
Analysts said the unrest in Moscow did not bring a shock to Wall Street but was enough to drive investors to the sidelines.
Investors had worried that the weekend violence in Russia might unsettle stocks. But early Monday, Russian hard-liners who had been holed up in the Parliament building surrendered after a 10-hour battle, which climaxed the worst political violence in Moscow since the 1917 Bolshevik Revolution.
The Dow Jones industrial average was down 3.35 points to end at 3,577.76, but in the broader market advancing issues outnumbered declines by about 4 to 3 on New York Stock Exchange volume of 229.38 million shares.
Rebel Vice President Alexander Rutskoi and Parliamentary Chairman Ruslan Khasbulatov surrendered to Yeltsin forces during the day. President Clinton said President Boris N. Yeltsin appeared to have restored order. But about 1,000 demonstrators mobbed television studios in St. Petersburg.
The weakness in the Dow also stemmed from profit taking in oil stocks. “They had a big run last week, so it’s kind of like a little bit of catch-up,” said Kenneth Ducey, director of trading at BT Brokerage.
Some analysts said that with the turmoil in Russia failing to spark any life in the market, traders were looking to third-quarter corporate earnings and Friday’s September employment report.
Corporations will release profit results for the latest three-month period that ended with September later this month.
Among the market highlights:
* Chevron was off 2 to 96 3/8, Exxon dipped 5/8 to 65 5/8 and Texaco fell 3/4 to 68 1/8.
Buying in selective gaming, biotechnology and high-technology shares lifted the Nasdaq market.
Investors will be looking ahead to Friday’s key September employment data, said Gene Jay Seagle, Gruntal’s technical research director. “With the Russian thing getting settled, tension is moving to economics,” he said.
* HCA-Hospital Corp. of America rose 6 1/8 to 28 7/8, while Columbia Healthcare dipped 1 3/8 to 28 7/8 on news that Columbia plans to acquire HCA for $5.69 billion in a tax-exempt stock swap.
* Among gaming stocks, President Riverboat rose 1 to 45 and Casino Magic added 1 3/4 to 20.
* Biotech Chiron rose 1 1/2 to 77 3/4 and Cygnus Therapeutic gained 1 1/2 to 8 1/4. Software stock Legent added 2 3/4 to 24 1/4.
Stocks closed higher in European trading but lower in Tokyo. London’s Financial Times 100-share average closed 28.4 points higher at 3,067.7 and Frankfurt’s 30-share average gained 11.63 points to finish at 1,923.72. In Tokyo, the 225-share Nikkei average ended down 18.70 points at 20,264.43.
Credit
The lackluster session came despite a small rush to buy short-term securities following Yeltsin’s move to crush an armed challenge by hard-line opponents.
But the flurry of initial buying faded as it became evident that Yeltsin remained firmly in control, analysts said.
The yield on the Treasury’s main 30-year bond rose to 6% from late Friday’s 5.99%, while its price, which moves in the opposite direction, fell 1/8 point, or $1.25 per $1,000 in face value.
Short-term Treasury securities, meanwhile, rose 1/32 point and intermediate maturities rose 3/32 point to 1/8 point, the Telerate Inc. financial information service reported.
The appearance of more instability spurred some investors to seek the security of short-term bills and notes, considered a safe-haven investment.
The federal funds rate, the interest on overnight loans between banks, was 3.063%, down from 3.25% on Friday.
Other Markets
The dollar dropped against most major currencies when it appeared that Yeltsin had won control of Moscow, relieving investors’ fears of an interruption in Russia’s transition to a market economy.
“It’s very much a headline-driven market,” said Matt Porio, a vice president at Chase Manhattan. Once Yeltsin’s foes surrendered, he said, “we saw a selloff of the dollar.”
Margaret Kudarauskas, a foreign exchange analyst for the Technical Data analysis firm, said many traders had stocked up on dollars Friday since they didn’t know what would happen over the weekend in Russia.
In New York, the dollar lost nearly a pfennig to close at 1.624 German marks. The greenback was quoted at 105.79 Japanese yen, down from 106.00 on Friday.
In other markets:
* Gold prices also fell. On the New York Comex, gold for current delivery closed at $352.70 an ounce, off $2.30 from Friday. Silver closed at $4.054 an ounce, up 1.4 cents.
* Oil futures prices traded lower, with light, sweet crude oil for delivery in November settling at $18.42 per barrel, down 21 cents at the New York Mercantile Exchange.
Market Roundup, D14
