WALL STREET Budget deficit proposal fails to hold prices

Press, 5 August 1985, Page 34

WALL STREET Budget deficit proposal fails to hold prices

NZPA-AP New York The New York stock market declined slightly on Friday as traders assessed the outlook for the Federal Budget deficit. On Thursday, Congress approved a Budget proposal intended to shrink the projected Federal deficit $U555.5 billion ($NZ105.45 billion) in the fiscal year that will begin on October 1. Stock prices rose in Thursday’s session as traders anticipated the agreement, which broke, a long deadlock between the House and senate.

However, analysts said there were many questions in investors’ minds about how far the measure would go towards resolving the deficit problem.

In Friday morning’s economic news, the Labour Department reported that the civilian unemployment rate held steady at 7.3 per cent in July. It also said

non-farm payrolls, a figure closely watched on Wall Street, posted a larger-than-expected increase. That was taken by some observers as fresh evidence that the pace of the economy was reviving after a sluggish first half of 1985. The Dow Jones average of 30 industrials slipped 2.57 points to 1353.05, finishing the week with a net loss of 4.03 points. Declines outpaced advances about five to four. The exchange’s composite index dropped 0.33 points to 110.85. Last week began on Wall Street with a broad setback in the face of persistent doubts about the outlook for interest rates. The Dow Jones average of 30 industrials fell 13.22 points to 1343.86, its largest loss since it dropped 16.24 points on June 13. Declines outpaced advances by about four to one. The market was mixed on Tuesday, steadying. The Dow Jones rose 2.24 points, but declines outpaced advancers about five to four. Analysts said Monday’s drop prompted some further selling early on Tuesday to cash in profits from the market’s late-spring and early-summer rally to record highs.

Stock prices showed a modest gain on Wednesday, aided by some upbeat economic news. The Dow Jones rose 1.35 points, and advances outpaced declines more than three to two. Before the market opened, the Government reported that the index of leading economic indicators rose 1 per cent in June. It was the largest increase in five months for the index, which is designed to detect future economic trends. The index reading for May, which had previously been reported as an increase of 0.7 per cent, was revised downward to plus--0.1 per cent. But analysts said the leading indicators still seemed to be pointing towards reasonable growth in business activity in the months ahead. The Commerce Department said new factory orders rose 1.9 per cent last month. Analysts said the statistics generally provided support for hopes that economic conditions would be healthy enough through the second half of the year to allow for an improvement in corporate profits. On Thursday, prices kept moving ahead. The Dow Jones rose 8.17 points, and rises led falls, two to one.

Prices of a selection of issues on Friday were: Alcan Alu 28%, Alcoa 35%, Amerad Hes 28%, ABC 114%, Am Express 44%, Am Motors 3%, ATT 21%, Armco 10%, Asarco 22%, Atl Rich 58%, Beth Stl 18%, Boeing 49%, Borden 38%, Burroughs 64%, Chrysler 36%, Citicorp 47%, Coca Cola 72%, Colgate 28, CBS 111, Conti Grp 27%, Crane 38%, DarKrft 35%, Digital 103%, Disney 90%, Dome Mines 8%, Dow Chem 36%, Du Pont 59%, East Kodak 45%, Englhrd Cp 28Vi, Exxon 51%, Firestone 20%, Fluor 17%, Ford 44%, Frpt McMor 19%, Gen Dynam 75%, Gen Elec 64%, GM 71%, Gen Tire 44%, Goodyear 29%, Greyhound 28%, Grumman 30%, Gulf Oil 14%, Haliburton 29%, Homestake 27, Honeywell 65%, IBM 131%, Inti Harv 9%, INCO 14%, ITT 33%, Levi Strauss 49%, Lockheed 53%, Manville 7%, JhsnJhsn 46%, Kaiser Alu 15%, K Mart 34%, McDonald’s 66%, McDon Doug 80%, MGM Film 17%, MMM 79%, Mobil 29%, Monsanto 53%, NCR 34%, Newm Min 43%, Pfizer 49%, Phel Dodge 23%, Phil Pete 12%, Polaroid 32%, RCA 44%, Raytheon 48%, Reyn Metal 37%, Royl D Pet 60%, Seagrams 42%, Seas Roe 36%, Shell Rt 37%, Sperry 50%, Chevron 37%, Sohio 45%, Texaco 35%, Texas Inst 103, Union Carb 52%, US Steel 31, Westg Ele 35%, Woolworth 45%, Xerox 53%, Schlumberger 37%, Merryl Lynch 33%, Occidental 33%, Heinze 53%, Clevel’d Cliff 20, Int-North 40%, AmAirlines 50.