A WILD QUARTER ON WALL STREET : Stocks Survive a Roller Coaster Day : Dow Takes a Beating, but Closes Slightly Higher
Seesawing through another volatile session Thursday, stocks closed mixed, with the Dow Jones average rebounding from an initial plunge to finish higher for the first time in six sessions, aided by lower long-term bond yields.
The Dow industrials managed to eke out a gain after renewed buying surfaced in the late going. Buyers favored stocks of big-name companies that had been battered during the market’s recent downturn, which helped the Dow industrials edge up 9.21 to 3,635.96. At one point during the morning, the average had been down more than 65 points.
However, the blue-chip gauge has lost 138.77 points since last Friday, the worst week’s showing since a 216.26-point descent during the week ended Oct. 13, 1989.
The yield on the Treasury’s 30-year bond, which had been up early in the day to a high for the year of 7.15%, retreated to 7.08%, compared to 7.10% at Tuesday’s close. A week ago, the yield closed at 6.95%. The bond’s price, which moves inversely to the yield, was up 7/32 point, or $2.19 per $1,000 in face value.
Trading was brisk as market participants adjusted holdings on the closing day of the first quarter and took positions ahead of the long weekend.
The stock market will be closed for Good Friday.
Several broader market indicators also ended with deficits, and losers outnumbered gainers about 2 to 1 on the New York Stock Exchange. Big Board volume amounted to 399.30 million shares, for the busiest day since 446 million shares were traded on March 18--a triple-witching expiration date. On Wednesday, 390.52 million shares changed hands.
The NYSE composite index fell 0.28 to 247.06, leaving it 9.23 lower in the week; The Standard & Poor’s 500-stock index crept 0.22 higher to 445.77, but still ended down 14.81 for the week. The Nasdaq composite index of mostly smaller issues slipped 1.45 to 743.45 and tumbled 40.00 in the week.
Waves of computer-guided selling periodically washed over the market, at one time dragging down the Dow industrials more than 67 points.
As has happened on several occasions lately, the NYSE was forced to invoke its restriction on a form of computerized trading. The regulation, adopted after the market crash of October, 1987, is intended to cope with hectic market conditions.
“People were breathing a sigh of relief at the end of the day,” said Don Hays, investment strategist at Wheat First-Butcher & Singer. “But the downturn may not necessarily be over. The market is trying to hit bottom, but there’s no real evidence that that’s the case yet.”
Stocks opened on a steadier note after the previous session’s setback, which plunged the market to levels not seen since last autumn, seemed to lure buyers back.
But the selective buying was replaced by selling within the first half hour of trading, as the bond market reacted negatively to a report from the Chicago Purchasing Management Assn. that showed improved conditions in the region.
The report reinforced the inflation fears that have hammered the market in recent weeks. Stronger economic growth can aggravate inflation, which erodes the value of fixed interest-bearing investments.
Aggravating the price decline, some managers of investment funds sold seven-year and 10-year Treasury notes to minimize their losses in mortgage-based securities, said Frank Sannella, money market analyst at Technical Data in Boston.
But the Treasury bond market regained ground, partly because the tumbling stock market reassured some traders that investors would seek fixed-income securities as an alternative.
Short-term treasuries fell 1/32 point and intermediate maturities rose 1/16 point to 1/4 point, the financial information service Telerate Inc. reported.
Other economic news, including the government’s revised reading on the gross domestic product, had a neutral impact on the financial markets.
Despite the minor gain in the Dow industrials, market analysts said the hectic action represented a continuation of the selloff that started when the Federal Reserve began nudging up interest rates in early February.
* The Big Board’s list of active stocks was studded with big names, many of which turned up in afternoon action. Chrysler headed the list. It rose 1 1/4 to 51 7/8, while IBM jumped 1 to 54 1/2.
Gold stocks gained along with the price of the metal, which rose on the New York Comex to $391.80 an ounce, up $5.90, on concerns over unrest in South Africa and safe-haven buying in reaction to the stock market selloff. Silver climbed 14.5 cents to $5.785 an ounce.
* Battle Mountain Gold rose 3/4 to 12; Newmont Mining gained 3/4 to 57 3/8; Homestake Mining added 3/4 to 22 3/8.
* Software Toolworks led the Nasdaq’s most-active list, rising 4 3/8 to 14 3/8. It agreed to be acquired by British-based Pearson Plc.--another in the recent rash of software industry deals.
* Pyramid Technology fell 4 3/4 to 7. Two Wall Street firms downgraded the stock to “hold” from “buy” after the company warned of a “substantial loss” for its second quarter.
* Cambridge Biotech slightly more than halved its stock value, down 1-7/16 to 1/3/8. Late Wednesday, it said its auditors had resigned and withdrawn their financial opinion.
Early in the session, the dollar sustained heavy losses as it followed the stock market into a steep dive. But as the market recovered, so did the currency.
Meanwhile, crude oil futures rose for a third straight day on the New York Merc, as the market continued to rebound from sharp losses on Monday. Light, sweet crude for May delivery rose 41 cents to $14.79 a barrel.
Market Roundup, D6
