NEW YORK — Stock and bond prices prices tumbled in active trading Friday as the market absorbed stronger-than-expected news on the employment situation. The stock market retreated from Thursday's record high.
On the New York Stock Exchange, utility and financial issues were notable losers as open-market interest rates continued their weeklong rise.
The Dow Jones average of 30 industrials fell 19.96 to 1,899.75, finishing a volatile week with a net gain of just 1.41.
In the bond market, the price of the Treasury Department's key 30-year bond dropped $12.50 for each $1,000 in face value, and its yield jumped to 7.54% from 7.43% late Thursday.
Volume on the New York Stock Exchange came to 180.62 million shares, against 189.42 million on Thursday.
Brisk Economic Pace
Stock and bond market analysts said the jobless statistics, along with generally strong sales reported by major retailers on Thursday, suggested that economic activity set a fairly brisk pace last month. That was taken as a plus for the outlook for corporate earnings. But observers said it also seemed to diminish the chances for any further moves by the Federal Reserve in the near future to ease credit.
Bond prices usually decline in reaction to good economic news because the amount of borrowing increases when the economy improves, driving up interest rates, or the cost of credit. Interest rates and bond prices move inversely.
Analysts also said the stock market was weighed down by recurring inflation worries, with the price of gold continuing its recent rally. Gold for October delivery jumped $12.80 to $422.80 an ounce on the Commodity Exchange in New York.
Financial and utility issues, which are highly sensitive to changing interest rate expectations, were broadly lower. Federal National Mortgage fell 1 7/8 to 32 5/8 and Great Western Financial 3 to 41 7/8.
Among the regional telephone utilities, Ameritech was down 4 at 146, Southwestern Bell 2 3/8 at 112 5/8 and Bell South 1 7/8 at 64 1/2.
Energy Stocks Gain
The Dow Jones average of 15 utilities tumbled 5.11 to 213.71--a loss of 2.34%.
Energy stocks were steady to slightly higher, extending their recent rally on signs of strengthening oil prices. Occidental Petroleum rose 1/2 to 30, Schlumberger to 34 1/2 and Chevron 3/8 to 47.
Syntex dropped 3 3/8 to 65 3/4. The company said it expects to post about a 15% earnings gain for its most recent fiscal quarter--an estimate that evidently disappointed investors.
Pittston, which said its third-quarter results could drop to "near break-even levels," lost 1 to 13.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 213.19 million shares.
Large blocks of 10,000 or more shares traded on the NYSE totaled 3,524, compared to 3,559 on Thursday.
In the overall tally on the Big Board, declining issues outnumbered advances by more than two to one.
Standard & Poor's index of 400 industrials fell 2.83 to 277.21, and S&P's 500-stock composite index was down 3.36 at 250.47.
In the secondary market for Treasury bonds, prices of short-term governments fell 5/8 point, intermediate maturities fell 1 1/8 point and long-term issues were down 1 point, the investment firm of Salomon Bros. said.
In corporate trading, industrials and utilities fell one point in light to moderate dealings. Among tax-exempt municipal bonds, general obligations fell 3/8 point and revenue bonds were down one point. Trading was light to moderate.
Yields on three-month Treasury bills were up three basis points to 5.23%. Six-month bills rose four basis points to 5.30%. One-year bills were up four basis points at 5.39%. A basis point is one-hundredth of a percentage point.
The federal funds rate, the interest on overnight loans between banks, traded at 5.688%, down from 5.75% late Thursday.