Wall St firm as int. rates fall

Press, 3 June 1981, Page 25

Wall St firm as int. rates fall

Profit taking took the NewYork stock market off its highs in the final hour of trading on Monday, but it still finished with a strong gain.

Fuelling the rally was the belief that interest rates are at their peak, at least for the near term, a view that was reinforced by Friday’s report of a decline in money supply and business loans in the latest week. The Dow Jones industrial index ended six points higher, after being up 11 points earlier, and rises led falls nine to seven as volume widened to 61 million shares, from 51.58 million on Friday. Several big banks cut their prime lending rates on Monday. Among banks that cut their base rates on business loads to 20 per cent from 20.5 per cent today were Morgan Guaranty Trust, Chemical Bank, Continental Illinois National Bank and Trust, and First National Bank of Chicago. The banks rank

fifth, sixth, seventh and ninth in the nation by deposits. The third-ranked Chase Manhattan Bank was the first to make the reduction, last Thursday. Two ' smaller banks, in Ohio and Missouri, cut their prime rates to 19.5 per cent from 20.5 per cent. The U.S. dollar eased from its highest levels to end mixed after the Federal Reserve reported a greater-than-expected decline in U.S. money supply in the latest week, dealers said. Dealers said that uncertainty about the interest rate outlook still persists, although few believe rates will decline substantially over the near term. The dollar is also likely to be supported by continuing concerns about ‘political developments in Europe and the Mid-East, they added. Sterling traded in a narrow range, finishing at $2.0720/35, up slightly from an opening $2.0705/15.