Wall Street prices drop

Press, 19 May 1984, Page 21

Wall Street prices drop

NZPA-NYT New York The New York stock market, saddled with a variety of economic and international uncertainties, fell sharply on Thursday in heavy trading The 'main casualties were the bluechip, technology, and airline issues. The Dow Jones industrial average tumbled 10.89 points to 1142.27. In the over-all market, losers on the New York Stock Exchange outnumbered winners more than three to one.

Prices opened lower and began to fall sharply shortly after 12.30 p.m. when it was announced that Federal regulators and major banks had agreed to give the troubled Continental Illinois National Bank $2 billion in financial aid Continental Illinois’ stock, which did not open for trading until 1.29 p.m., topped the most-active list and fell l’/s points to 10 A. Another market depressant was concerned that the recent attacks on Kuwaiti and Saudi oil tankers in the Persian Gulf might intensify. In the last three weeks

five such attacks have occurred. The latest attack caused a sharp rise in the price of oil in the spot and futures markets on Wednesday.

Contributing to the market’s weakness was investors' apprehension that interest rates will continue to rise in tne near-future because of the strong economy. Increasing interest rates have been blamed mostly for the market's big sell-off since midJanuary. After the market’s close, the Federal Reserve reported that the nation’s money supply in the week ended May 7 climbed $4.9 billion, or in line with what most economists had expected. The large increase is not expected to encourage the board to loosen its monetary reins and thus reduce pressure on interest rates.

Mr Charles Jensen, chief technical analyst of MKI Securities Corporation, said that the market “is now in the throes of a selling wave” which could continue over the next few days with the Dow average dropping to about the 1120 level.