More history on Wall Street

Press, 28 August 1982, Page 19

More history on Wall Street

PA New York The stock market had its busiest trading session in Wall Street history.yesterday and stocks closed at their highest level this year as more investors rushed to take part in the market's rally. Volume on the New York Stock Exchange totalled 137,330,000 shares, eclipsing the previous record of 132.6 million, established only last week, about an hour before the close. The Dow Jones Industrial Average rose 7.52 points to 892.41, its highest close since December 4, 1981. The index rose as much as 18.65 points during the day, passing a psychological milestone, the 900. level. It was the fourth consecutive day that turnover exceeded 100 million shares, and volume this week has already surpassed last week’s record total of 455.1 million shares. Analysts said that the Federal Reserve Board’s cut in the discount rate — the Central Bank’s principal lending rate - to 10 per cent from 10.5 per cent after the market closed would probably buoy prices again today. They said the market seemed determined to shrug off any bad news, such as the announcement that Manville Corporation had filed for bankruptcy. “There is still an overwhelming demand out there for stock,” one analyst said. “The few investors that had been sitting on the sidelines are now coming in at any

price.” “When the DJ got above 900, there was a wave of profit-taking by institutional investors who started to get nervous.” . The late selling focused primarily on blue chip and heavily capitalised stocks, traditional favourites of institutional buyers. The breadth figures showed that the rest of the market performed better than the blue chips, as represented by the DJ Average. The Dow has now gained an unprecedented 115.49 points during the past 10 sessions. Only two weeks ago, the index reached its low for the year of 776.92. The market erupted last week with hopes that interest rates would continue to fall, and influential economist Henry Kaufman bolstered the belief when he reversed his pessimistic forecast, on interest rates. Then last Friday, major banks began reducing their prime rate, used for their best corporate customers. Yesterday was the fourth time since July 19 that the Fed has cut the rate, and analysts said this was perceived as a commitment to lower interest rates by the Central Bank. Last week the rally centred on blue chip stocks and institutional buying, but yesterday many secondary stocks like technology and energy issues gained ground. Analysts saw this as an indication that the public was entering the market'in large numbers.