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Dow Slumps 9.79 in Broad Retreat : Lack of Buying Interest, Concern Over Economy Cited

December 05, 1987|From Times Wire Services

NEW YORK — Stock prices declined again Friday, and the Dow Jones industrial index edged closer to the depths of its historic fall on Oct. 19, although it trimmed its losses late in the session.

The Dow index, which tumbled 72 points on Thursday, slipped 9.79 to 1,766.74. That left the closely watched index at its lowest point since it plunged more than 500 points to 1,738.41 on Black Monday.

Traders said that while there was no specific reason for the latest slump, a general lack of buying interest prevailed over the market amid lingering doubts about the economy.

"The major investors and players are no longer there," said Larry Wachtel, a market strategist and first vice president at Prudential-Bache Securities.

"The institutional investor has checked out, mutual funds are building up cash to meet redemptions and the smaller investor is nowhere to be seen," Wachtel said.

"The market looked like it was groping for a bottom today," said analyst Michael Metz of Oppenheimer & Co.

"We had a little bit of a narcissistic market today. It was not that concerned with external factors; all eyes were on the market's internal factors," Metz said.

Metz believes that the decline may have concluded the testing of the October lows that many technically oriented analysts have been waiting for.

Broad Declines

In the broader market, declining issues led gainers by 11 to 3 on the New York Stock Exchange.

Big Board volume totaled 184.80 million shares, much lower than the 204.16 million in the previous session.

Prices got off to a shaky start from the opening bell following early declines in the dollar.

Blue chips rallied by late morning but quickly lost ground as buying interest waned amid continuing uncertainty over key market factors such as the strength of the dollar and the economy.

The Dow index remained sharply lower for most of the session until right before the close, when some late buying based on technical factors allowed the market to cut some of its losses.

Analysts said the market was still reacting to Thursday's disappointing sales reports from the nation's leading retailers and to worries about the government's attempts to cut the massive U.S. trade and budget deficits.

Market participants tended to ignore the Labor Department's report that unemployment fell by 0.1 percentage point to 5.9% in November.

"It's fear and greed that moves markets," said A. C. Moore, a market analyst for Argus Research. Among active blue chips, International Business Machines rose 1 to 107 3/8, American Telephone & Telegraph was unchanged at 26, Eastman Kodak was down to 44 and General Electric gained 1/8 to 40.

Large blocks of 10,000 or more shares traded on the NYSE totaled 3,241, compared to previous day's 3,092.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 217.07 million shares.

The NYSE's composite index fell 1.10 to 125.91.

Standard & Poor's index of 400 industrials lost 1.43 to 255.43, and S&P's 500-stock composite index was off 1.29 to 223.92.

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