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Dow Off 11 as Interest-Rate Fears Persist

September 09, 1986|From Times Wire Services

NEW YORK — Stock and bond prices fell again Monday as concern persisted over rising interest rates.

The Dow Jones average of 30 industrials, down 19.96 on Friday from Thursday's record closing high, dropped an additional 11.11 points to 1,888.64.

Volume on the New York Stock Exchange slowed to 153.30 million shares from 180.62 million Friday.

Analysts said investors were still unsettled by the prospect of an economy that at last seems to be picking up momentum.

On the basis of early data on employment and retail sales in August, some observers have concluded that more upbeat statistics on the pace of business activity will be issued in the near future.

That would be a plus for corporate profits. But brokers say it also raises serious doubts about the likelihood of further declines in interest rates. At the same time, it also has helped to engender talk of some revival in inflation.

Bellwether Bond Dips

In the credit markets Monday, the Treasury's key 30-year bond, which fell $12.50 for each $1,000 in face value late Friday, fell 11/16 points, or about $7. It yielded 7.60%, up from 7.54% late Friday.

Low inflation and falling interest rates have been central themes in the bull market in stocks during the past four years.

Bank stocks were notably weak in the face of the recent rise in interest rates. J. P. Morgan fell 3 1/2 to 87 1/8, Chemical New York 1 to 46, Citicorp 2 to 52 1/2, Chase Manhattan 1 to 38 5/8 and Manufacturers Hanover 3/8 to 44 3/4.

Lomas & Nettleton Financial tumbled 5 3/4 to 39. In its annual report, the company said it expects an earnings increase of about 5% in the current fiscal year, a smaller gain than many analysts had projected.

Declining issues outnumbered advances by more than two to one on the Big Board. The exchange's composite index dropped 1.47 to 142.42.

Large blocks of 10,000 or more shares traded on the NYSE totaled 2,595, compared to 3,524.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 179.60 million shares.

In the secondary market for Treasury bonds, prices of short-term governments fell 7/32 point, intermediate maturities fell 15/32 and 20-year issues were down 5/8 point, according to the investment firm of Salomon Bros. The movement of a point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.

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