WALL STREET Late selling rush pulls prices down

Press, 18 March 1985, Page 32

WALL STREET Late selling rush pulls prices down

NZPA-AP New York A barrage of selling just before the close sent stock prices sharply lower on Wall Street on Friday. ' Analysts said it appeared that professional traders conducting complex transactions involving stock-index futures were behind the sell-off. They did not believe it had any link with the temporary closing of some. Ohio savings institutions on Friday. Mr Richard Celeste, the Governor of Ohio, on Friday morning ordered that about 70 privately insured savings and loans institutions be closed for three days because of some reported runs on deposits. The situation arose after one institution closed because of losses associated with the collapse of a Florida investment firm, ESM Government Securities Inc. The news touched off an apparent “flight to safety” in the credit markets, with heavy buying of short-term U.S. Treasury bills early in the day. But Wall Street analysts said the great majority of banks and savings institutions in the United States were covered by federal deposit insurance. They said there was nothing to indicate that the banking system as a whole would be affected in any significant way. The Dow Jones average of 30 industrials fell 12.70 points

to close at 1247.35 on Friday, finishing the week with a net loss of 22.31 points. Declines outpaced advances by about four to three on the New York Stock Exchange. Prices on Wall Street fell on both Wednesday and Thursday. Mr Alfred Goldman, an analyst with A. G. Edwards and Sons, said: “There is continuing indecisiveness among formerly aggressive traders with aggressive money. But at least the market has whittled down the short-term overbought mania of January.” Before the market opened on Wednesday the Commerce Department reported a 1.4 per cent jump in United States retail sales last month. The total was well above most advance estimates, and significantly exceeded the revised gain of 0.5 per cent in January. Mr Malcolm Baldrige, the American Secretary of Commerce, said the increase was a positive portent for growth in production and employment. But the news was not welcomed by traders in the credit markets, who fear that persistent strength in the economy may intensify demand for credit and revive inflationary pressures. The market was mixed on the first two days of last week, falling a point on Monday, and gaining 3.20 points on Tuesday, amid speculation about whether the market has “topped out."

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