Wall Street lacks confidence

Press, Volume CXIII, Issue 33230, 21 May 1973, Page 18

Wall Street lacks confidence

The Wall Street stockmarket plunged steadily ( last week as investor confidence continued to be shaken by the Watergate scandal, the weakening dollar, a warning of a recession, and the tight-money policy of the Federal Reserve.

At 895.17 the Dow Jones index on Friday closed at its lowest level for 18 months. "The market is still feeling the fallout of the tightening by the Federal Reserve and the lead article in the “Wall Street Journal” telling of some prestigious economists’

clearly indicating a possible recession," a broker said.

“An article of this nature coming at this psychological junction did a great deal of damage.” Another broker said that the market was looking only at the bad news, mainly because of the Watergate scandal.

“The British Government is now concerned with Watergate, and this they feel has rubbed off on the year of Europe,” he said. “There is now a credibility question of our White House and its tenant, and this is definitely reflected in the market.” The dollar was under attack, and the price of gold was rising strongly, two unsettling facts for investors. Earlier in the week, Wall Street observers had taken heart when the market recovered from its fall through the 900 barrier on Monday. The recovery was partly technical, and partly in reaction to the White House announcement that Mr John Dean, the ousted Nixon counsel, was “clearly in charge” of the Administration’s Watergate investigation. However, the recovery was not sustained, and the market resumed the weaker trend which culminated on Friday with another fall through the 900 barrier—this time permanent—on the highest trading volume of the week.

Closing prices on Friday of some selected stocks were:

Alcan, 27t; Alcoa. 572; Amerada Hess, 34; Amax, 30); Asarco, 18g; Anaconda, 18J; Atl. Richfield, 79); Cont. Oil, 28); Dome Mines, 94; Dow, 48; Engelhard, 18; Ford, 56g; Freeport, 21J; G.M., 67); Greyhound. 14); Gulf OU, 235; Homestake, 49;; Hudson Bay, 23g; 1.8. M., 389; Inco, 275; Kaiser Aluminium, 15t; Kennecott, 241; Kerr McGee, 574; Louisiana Lana, 33); Martin Marietta, 16); MobU, 61;; Newmont Mining, 23g; Phelps Dodge, 41; Phillips Pet., 45); Reynolds, 15; Royal Dutch, 42; St Joseph. 26g; Shell Oil, 463; Shell Transport, 34;; Std OU Cal., 74;; Std OU Ind., 88); Std Oil Ohio, 100; Exxon, 94); Texaco, 36); Texas Gulf, 20t.