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Stocks Mixed in Erratic Trading; Dow Gains 2.45 : Blue Chip Issues Steady in Wake of Indicator's Record 91.55-Point Dive

October 08, 1987|From Times Wire Services

NEW YORK — Stock prices were mostly lower in an erratic session Wednesday, but blue chip issues showed signs of stabilizing after Tuesday's record-breaking drop and a prime rate hike early in the day.

The Dow Jones index of 30 industrials, which had fallen 91.55 points Tuesday, edged up 2.45 to 2,551.08. Other, broader market measures posted losses. Declining issues outnumbered advances by nearly 2 to 1 in the overall tally on the Big Board and the exchange's composite index of all its listed common stocks lost 0.43 to 178.55.

Volume on the New York Stock Exchange came to 186.25 million shares, against 175.60 million in the previous session.

The Dow was down as much as 20 points at first, and meandered through an up-and-down session the rest of the day.

As the market was struggling to right itself after Tuesday's down draft, many banks across the country raised their prime lending rates to 9.25% from 8.75%.

However, analysts said the banks' move came as no big surprise, given the recent rise of open-market interest rates that help determine the banks' cost of obtaining money to loan.

Interest rates in the bond market, meanwhile, showed only small changes in Wednesday's trading.

Brokers said some investors began to buy stocks in the belief that the drop on Tuesday didn't signal any long-term change in the market outlook.

Further Drop Expected

They noted that the selloff was concentrated in blue chips that have recorded strong gains this year, and came on volume of less than stampede proportions.

"The fact that people are not showing panic could be taken as a negative (indication) that the decline has further to go," said William Raftery, an analyst at Smith Barney, Harris Upham. He said there could be further downward probes toward 2,500 and perhaps into the 2,400s.

But he said such a decline would be a correction within a bull market. He still sees rotation from consumer stocks to capital goods and other cyclicals.

Gainers among the blue chips included International Business Machines, up 1 3/4 at 152 3/4; American Telephone & Telegraph, up 7/8 at 33 3/8; Merck, up 2 3/8 at 203 3/8; General Electric, up 1 5/8 at 61 3/8, and American Express, up 5/8 at 36 1/8.

GE reported that its third-quarter earnings rose to 77 cents a share from 66 cents in the comparable period a year ago.,

Day's Biggest Gainer

Auto issues, however, were mostly lower, with General Motors down 1 3/4 at 78, Ford Motor off 1 1/2 at 95 3/8 and Chrysler 5/8 lower at 39 5/8. Several Wall Street analysts lately have turned cautious on the outlook for the group.

United Stockyards was the day's standout percentage gainer, up 2 7/8 at 14 3/4. The company said it knew of no reason for the activity.

On the downside, the Limited fell 3 3/4 to 31. A Wall Street Journal article said "a sameness syndrome threatens a shakeout" for specialty-apparel retailers such as the Limited.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the- counter market, totaled 212.93 million shares.

Standard & Poor's index of 400 industrials fell 0.83 to 371.19, and S&P's 500-stock composite index was down 0.68 at 318.54. The Wilshire index of 5,000 equities closed at 3,147.946, down 7.766%.

The NASDAQ composite index for the over-the-counter market dropped 2.87 to 444.64. At the American Stock Exchange, the market-value index closed at 352.55, down 2.89.

Share prices around the world also tumbled in response to Wall Street's record drop.

In London, the Financial Times stock exchange index of 100 leading shares closed 8.1 points lower at 2,359.8. Tokyo's 225-share Nikkei index closed 136.7 points lower at 25,952.27, and Sydney, Australia's all-ordinaries index dropped 29.7 points to 2,217.2

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