Stocks Mixed to End Wild Week; Yields Slide
The stock market finished mixed but mostly lower Friday, capping a week of wild volatility. Meanwhile, bond yields posted their first significant decline since Monday.
On Wall Street, Friday the 13th saw the Dow trade in a narrow range after slumping 98.81 points on Thursday. The index ended up 1.16 points Friday at 6,304.87. For the week the net loss was 77.07 points, or 1.2%.
In the broad market most indexes were modestly lower Friday, with the Standard & Poor’s 500 index off 0.69 point to 728.64. Losers topped winners by 14 to 10 on the New York Stock Exchange.
Smaller stocks, which had held up fairly well Thursday even as the Dow tumbled, were hit harder on Friday. Losers outnumbered winners by 23 to 16 on Nasdaq, and the Russell 2,000 index of smaller stocks fell 0.6% to 354.18, though its full-week decline was just 0.4%.
The Dow charted a volatile course right from the opening bell, sliding more than 50 points only to reverse course and later surge to a 40-point gain.
Analysts said computerized program trading spurred the volatility as the market tried to find its footing after a series of setbacks over the past two weeks.
After a sensational surge in November stocks were hit by profit takers on Dec. 3, when the Dow dropped 79 points. Later that week the market was rocked by Federal Reserve Board Chairman Alan Greenspan’s comments about potentially “irrational exuberance” in markets, though Greenspan was merely posing a question, and speaking generically about financial markets.
This week, stocks were hit by a jump in bond yields at mid-week, on worries about foreigners’ rising holdings of Treasury bonds, and whether those buyers might turn into sellers.
Yet the bond market calmed fairly quickly this week. The bellwether 30-year Treasury bond yield, which jumped from 6.49% Tuesday to 6.63% on Wednesday, ended Friday at 6.57%, up only slightly from 6.51% a week ago.
“Bonds’ [prices] are back up which definitely helped the stock market,” said Ricky Harrington, technical analyst at Interstate/Johnson Lane. “[Friday] morning we had extreme volatility and that’s been the case for eight or nine sessions now. That’s likely to continue to be the case going into early 1997.”
Analysts say year-end book squaring and concerns about corporate earnings in 1997 could continue to chip away at stocks.
Among Friday’s highlights:
* Technology stocks were broadly lower as the sector took its cue from profit-taking in Intel, which fell 4 1/2 to 132 3/8, and disappointment over quarterly earnings reported by Oracle, which dropped 3 1/4 to 44.
Other tech losers included Iomega, off 1 1/4 to 18 3/4; and Ascend Communications, down 3 1/2 to 67 3/8.
* Philip Morris lost 2 1/4 to 111 1/2 a day after a Florida judge said the state can accuse the tobacco industry of racketeering. RJR Nabisco Holdings dropped 5/8 to 32 7/8.
* Quaker Oats jumped 2 1/4 to 38 1/4 on renewed speculation that it may shed its troubled Snapple and Gatorade businesses.
* American Express eased 3/8 to 53 1/2 and Citicorp added 5/8 to 99 1/4 after reports that Citicorp held unsuccessful talks to acquire American Express.
