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Wall St. Calms Down; Dow Rises a Fraction

October 23, 1987|Associated Press

NEW YORK — The stock market closed out its worst week since the Great Depression today with the wild swings in prices subsiding into a relative calm.

The Dow Jones industrial average skidded when trading opened this morning, after stock losses in Tokyo and London. But the benchmark barometer of the nation's 30 blue-chip companies rallied to finish the day up 0.33 points at 1,950.76. After Thursday's tumble of 77.42 points, that put the average's loss for the week at just under 400 points.

On the New York Stock Exchange a little less than two stocks fell in price for every one that rose. By normal standards, trading--even though shortened by two hours--was heavy at 245.56 million shares on the NYSE, but nowhere near Thursday's 392.16 million shares or the frenzied levels that swamped the market earlier this week.

Some traders attributed selling to President Reagan's insistence Thursday night that the market panic incited by the unprecedented 508-point tumble in the Dow average Monday was merely a correction and that the economy remains healthy.

This was taken as an indication that Reagan and the Congress would fail to act decisively to correct the massive federal budget deficit, trade deficit and long-term U.S. debt that many believe are key causes of the market's anxiety.

"I think there obviously is some disappointment with Reagan," said Joseph Barthel, senior vice president and director of technical strategy at the Philadelphia brokerage Butcher & Singer Inc. "I think you're getting some selling because of fear that the President is fiddling while Rome burns."

The session was cut by two hours because of the buildup in paper work resulting from the week's unprecedented level of trading and will be shortened Monday and Tuesday also.

Although traders were reluctant to predict what might be ahead for the market, many said the intense pressure of recent days eased because of trading limits and the shortened hours imposed by major U.S. exchanges. Some said positive reports from Washington about low inflation and stronger economic growth also helped.

Earlier today in Tokyo, home of the world's largest stock exchange, the key Nikkei stock average plunged 1,203.23 points for its second-largest one-day decline. Prices also fell sharply in London Stock Exchange trading, tumbling 51.5 points by mid-afternoon after a 110.6-point drop Thursday.

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