Stocks Close Lower; Yields on Long-Term Bonds Fall
Market Overview * Blue chip issues closed slightly lower Friday, although bargain hunters helped the overall market regain some lost ground.
* Long-term bonds yields retreated, but fears of higher interest rates continued to batter shorter-term maturities.
Stocks
Buying seemed highly selective and investors tended to shun blue chip issues, pushing the Dow Jones industrial average down 1.12 points to 3,838.78. For the week, the average was down 48.68 points. On Thursday, the Dow lost more than 50 points.
Among the broader market indexes, the New York Stock Exchange composite index and the Standard & Poor’s 500 index closed higher.
On the Nasdaq Stock Market of mostly smaller issues, the composite index rebounded 4.34 to 783.78.
On the NYSE, advances outnumbered declines by a small margin, and trading was moderate: 273.68 million shares changed hands, compared to Thursday’s 342.94 million.
Market watchers said Thursday’s steep selloff gave investors an opportunity to buy stocks at lower prices.
Among the market highlights:
* Cable television stocks recovered after being pounded Thursday by the news of the collapse of the Bell Atlantic/Tele-Communications Inc. merger. TCI rose 1 5/8 to 24. Liberty Media, its merger with TCI still on track despite the demise of the Bell Atlantic deal, rose 1 1/4 to 23 3/4.
* US West jumped 1 1/8 to 40 1/2 in brisk NYSE trading as buyers bet that the regional telephone company’s stake in Time Warner’s entertainment division will put it in a good position to compete with cable operators.
* DSC Communications rose 1 1/2 to 54 1/4; Tellabs gained 1 1/2 to 53 1/4, and General Instrument, which fell 6 1/8 on Thursday, ended up 1 1/8 at 45 3/4.
* Citicorp rose 3/4 to 41 1/8 and First USA gained 1 1/2 to 30 1/2.
* Woolworth fell 3/8 to 22 1/2 on weak fourth-quarter results.
Tokyo’s 225-share average closed 37.90 points higher at 19,803.38. In Frankfurt, the DAX-30 average ended down 15.37 points at 2,074.92, and London’s Financial Times 100-share average gained 13.7 points to finish at 3,281.2.
Mexico City’s Bolsa index ended up 4.06 points at 2,596.39.
Other Markets
Market analysts said the modest price gains in long-term securities by no means signaled an end to the powerful selloff this month.
Instead, analysts traced Friday’s gains to overnight buying by overseas investors seeking to pick up bonds at bargain prices. But even the modest advance eroded as the day wore on, chipped away by further market worries that the Federal Reserve Board is eager to raise interest rates again.
The Treasury’s main 30-year bond yield retreated to 6.71% from 6.73% on Thursday. Its price, which moves in the opposite direction, rose 5/16 point, or $3.13 per $1,000 in face value.
Prices of shorter-term securities ranged from unchanged to slightly higher.
Prices of short-term Treasury securities were unchanged to up 1/16 point, and intermediate maturities rose 3/32 point to 1/8 point, the Telerate Inc. financial information service reported.
In other markets:
* The dollar declined against most major currencies following recent weakness against the German mark and the possibility of further yen strength after this weekend’s Group of Seven meeting.
* On the New York Comex, gold spot closed at $378.60 an ounce, up $2.10 from Thursday, while silver closed at $5.226 an ounce, up 5.4 cents.
* Light, sweet crude for April delivery fell 20 cents to $14.57 a barrel on the New York Merc.
Selected Interest Rates
Averages of daily rates ended Thursday, in percent.
Corporate AAA bonds: 7.15%
90-day CDs: 3.51%
3-month Treasury bills: 3.34%
Bank prime rate: 6.00%
Municipal bonds: 5.42%
Federal funds rate: 3.25%
Discount rate: 3.00%
Source: Federal Reserve Board
