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Dayton Hudson Stock Swings Wildly After Bogus Offer

June 24, 1987|MARTHA GROVES | Times Staff Writer

The service keeps a running account of how many stories it reports ahead of competition such as Reuters financial news wire, Rotbart said, recalling that "if we missed a big story by more than seconds, somebody had to stand to answer for it."

Paul E. Steiger, a deputy managing editor of the Wall Street Journal who responded to a reporter's questions Tuesday, said the news service follows a prescribed procedure when a tip is phoned in:

"We verify that the person we're talking to is, indeed, that person," Steiger said. "There are a variety of ways of doing that. Typically, we will call back the employer's offices and talk to the person again."

The report of the Herrlinger bid was filed through the paper's Pittsburgh-Cincinnati operation to the news service's New York headquarters, Steiger said, adding that he was not certain which of the two bureaus Herrlinger had phoned. The news service reported that it first confirmed his identity and then talked with him again before publishing the story.

Steiger defended the policy. "A wire service, like a newspaper, has got to make its best judgment about what's newsworthy. That's what we did. We followed up quickly with as much additional information as we could muster."

Trading in Dayton Hudson stock was halted by the New York Stock Exchange after initial reports of the bid moved on the Dow Jones News Service. The exchange then contacted Dayton Hudson, which said it had not received an offer.

But trading continued unabated on the Boston Stock Exchange and in the national over-the-counter market, where it hit the $63 high for the day. At least 72,200 shares of the stock changed hands on the Boston exchange at prices in the low $60 range.

For about 90 minutes, order imbalances prevented the New York exchange from resuming trading. When Dayton Hudson shares reopened at 11:35 a.m. EDT, the price had jumped to $59.

A spokesman for the New York Stock Exchange said it plans to conduct an analysis of trading in Dayton Hudson to determine how much stock was traded and when and who the traders were before and after the trading halt. He said the process will be completed in about six weeks, when the exchange will decide whether to initiate a formal investigation or to turn the case over to the Securities and Exchange Commission.

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