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Dow Slumps 16.58 in Quiet Session : Pre-Holiday Trading Pace Is Slowest Since September

November 26, 1987|From Times Wire Services

NEW YORK — Stock prices moved mostly lower Wednesday in the quietest trading in two months, finishing near their lows as Wall Street continued mulling economic developments and wound down a holiday-shortened week.

The Dow Jones index of 30 industrials closed down 16.58 points to 1,946.95.

In the broader market, decliners outpaced advancers by about 8 to 7 on the New York Stock Exchange, with 738 up, 815 down and 389 unchanged.

Big Board volume totaled 139.79 million shares, against 199.52 million in the previous session. It was the slowest day since 137.95 million shares changed hands on Sept. 25.

"There is some fear of holding stocks over long weekends. This hasn't been the most stable period for the market," said analyst Robert Stovall of Stovall/Twenty First Advisors.

Market historians noted that stocks tend to rise in holiday-shortened weeks, but it was not enough to overcome the recent pessimism on Wall Street, which has suffered one of its biggest setbacks ever in the past month.

Analysts said there was some early carryover buying from Tuesday's session, when stocks had rallied strongly on news of foreign interest rate cuts, but that was curbed by profit taking and weakness in the dollar and U.S. bond markets.

Another Rate Cut

The interest rate cuts by the central banks of West Germany and several other European nations were seen as helping to support the dollar and as a vote of confidence in the plan announced last week to trim the U.S. budget deficit.

West Germany's central bank cut another interest rate Wednesday, but the dollar weakened in overseas trading, helping depress U.S. bond prices in a thin market. Long-term government bonds fell about $6 for every $1,000 in face value.

Stock buying interest dried up throughout the session but the broad decline remained mild because selling volume also was light, and trading kept to a narrow range, analysts said.

"Most institutional investors did whatever selling they wanted to do into yesterday's (Tuesday's) rally," said Michael Metz, a technical analyst for the investment firm Oppenheimer & Co.

Stocks were little affected by the Commerce Department's report that durable goods orders were up by 0.3% in October following a 2.4% gain in September, said Larry Wachtel, of Prudential-Bache Securities.

Texaco jumped 2 1/8 to 30 5/8. Trans World Airlines said it agreed to acquire 12 million Texaco shares from Australian investor Robert Holmes a Court. TWA rose 1/2 to 18 5/8.

Pennzoil, which is locked in a multibillion-dollar legal battle with Texaco, jumped 3 7/8 to 73 5/8.

Among active blue chips, American Express rose 1/8 to 24 1/8, General Electric fell 3/8 to 45, IBM dipped 7/8 to 117 5/8, Philip Morris lost 4 to 89 1/2 and Exxon dropped 1 to 39 1/8.

Fewer Block Trades

Precious metals issues rallied, on what analysts said was speculation that rising commodity price indicators signaled higher inflation. ASA Ltd. rose 1 3/8 to 50 1/2, Hecla Mining gained 7/8 to 14 1/2, Newmont Mining added 3 to 39 1/2 and Echo Bay Mines rose 1 1/8 to 22.

Home Shopping Network rose 1/2 to 6 in active American Stock Exchange trading. The television retailer said it had purchased a regional brokerage firm and a seat on the New York Stock Exchange.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 168.17 million shares.

Large blocks of 10,000 or more shares traded on the NYSE totaled 2,798, compared to 3,786 on Tuesday.

The NYSE's composite index fell 1.03 to 136.90.

Standard & Poor's index of 400 industrials fell 2.50 to 279.86, and S&P's 500-stock composite index was down 2.29 to 244.10.

The Wilshire index of 5,000 equities closed at 2,378.256, down 13.568.

At the American Stock Exchange, the market-value index rose 1.36 to 249.71. The NASDAQ composite index for the over-the-counter market closed at 317.78, up 1.10.

In Tokyo stock prices rallied broadly in thin trading following Tuesday's interest rate cuts by three European nations.

The Nikkei 225-share index rose 1.59% or 363.67 points to 23,219.69, extending Tuesday's 150.46-point gain.

However, prices moved sharply lower on the London Stock Exchange, reflecting concern over the dollar's continued weakness.

The Financial Times-Stock Exchange 100-stock index fell 25 points in thin trading to close at 1,664.1, a 1.5% drop, after rising 31.4 points on Tuesday.

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