Stocks Close Frenzied Week With Tiny Gain
The Dow Jones industrial average closed a volatile Friday the 13th session with a tiny gain, but the broader stock market buckled under profit-taking for the second day in a row. Treasury bonds rallied for the first time since Monday.
After a whipsawed session, the Dow ended up 1.16 points at 6,304.87, steadying from back-to-back losses totaling 170 points. For the week, the Dow lost 77.07 points.
The Dow charted a frenzied 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 being rocked by a rapid rise in long-term bond interest rates.
Stocks fell Friday despite a rising bond market, where the 30-year bond added more than $5 for each $1,000 in face value and its yield fell to 6.57% from 6.62% Thursday.
“Bonds are back up which definitely helped the 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.”
The Dow index briefly dipped in the afternoon after President Clinton played down fears that a stock market correction would hurt the economy. However, some analysts minimized the significance of Clinton’s comments on the stock market.
Broad market indexes fell, led by a sharp drop in software and semiconductor issues, namely Intel, off 4 1/2 to 132 3/8. The Standard & Poor’s 500-stock index fell 0.66 point to 728.64, and the NYSE’s composite index fell 0.22 point to 384.07.
The Nasdaq composite index fell 13.42 points to 1,284.91, and the American Stock Exchange’s market value index fell 3.05 points to 576.06.
The Dow opened lower in continuation of Thursday’s aggressive sell-off, which pushed the blue-chip index down more than 98 points. It bottomed out after the Commerce Department said business inventories rose 0.5% in October, the biggest growth in three months.
Among Friday’s highlights:
* Technology stocks were broadly lower as the sector took its cue from the drop in Intel. Oracle lost 3 1/4 to 44; Micron Technology was off 1 to 35 1/2; Iomega shed 1 1/4 to 18 3/4; and Microsoft fell 1 to 80.
But IBM rose 3/4 to 152 3/8 after the company announced management and other changes designed to cut costs and improve efficiencies. Compaq added 3/8 to 80.
* Quaker Oats added 2 to 37 1/8 on renewed speculation that it may shed its Snapple and Gatorade businesses. Quaker declined to comment on the rumors.
* American Express fell 1/8 to 53 3/4 and Citicorp added 5/8 to 99 1/4 after reports that Citicorp held unsuccessful talks to acquire American Express.
* 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 in a lawsuit to recoup $2.4 billion in health-care costs.
* CAI Wireless Systems fell 5/16 to 1 5/16 after Bell Atlantic, down 1/4 to 60 5/8, and Nynex, down 1/8 to 45 5/8, said they are suspending a 1995 agreement for one year as the companies try to salvage what remains of their video venture.
