Wall St on defensive after hitting records

Press, 29 June 1987, Page 25

Wall St on defensive after hitting records

NZPA-AAP New York Wall St went on the defensive on Friday, retreating from Thursday’s record highs. Analysts said traders seemed reluctant to chase after a market advance that has lately been concentrated in a few blue chips and has lacked convincing volume.

Stock prices are believed to have benefited recently from buying by investing institutions eager to show heavily invested positions when they make their mid-year reports to clients.

But brokers have also voiced some concern that the market might be vulnerable to a setback once this period of "window dressing” ends.

The market set new record highs on Thursday, rebounding from a mild setback on Tuesday and Wednesday.

Analysts said declining interest rates helped the market resume the rally it began about a month ago.

The dollar showed strength in foreign exchange, recovering from a couple of days of weakness.

That helped send interest rates lower in the credit markets.

Thursday’s fall was in mostly active trading, as many investors sold shares and took their profits from the 11-day rally that ended the previous day. Analysts said Wall Street had been due for a decline after the recent long advance. Stock prices were also dampened by a weaker dollar and declining bond prices, analysts suggested. The resilience of the U.S. currency and the resulting strength in bond prices

had been buttressing Wall Street in recent sessions.

The dollar dropped against all major foreign currencies, prompting fears that more_expensive imports could rekindle inflation and sending bond prices lower. Wednesday’s fall snapped a robust 11-day advance. The market started out with a strong gain, supported as it has been in recent sessions by a stronger dollar, higher bond prices and growing foreign demand. But stock prices began to sag around midday as the dollar dropped and bond prices fell.

“The stock market took its cue from those two (the dollar and bonds),” said Hugh Johnson, senior vice-president of First Albany Corp, a brokerage firm in Albany, New York. .

Stocks had been boosted recently by continued strength in the dollar — which calmed fears of resurgent inflation — and in the bond market, analysts said. Selected Wall St prices from Friday’s trading were:—

Alcan 30, Alcoa 52%, Amerada 36%, AmExp 36, AmMtrs 4%, Armco 9%, Asarco 24, ARCO 94, ATT 28%, BethStl 15, Boeing 47%, Borden 61%, CBS 174, Chevron 60%, Chrysler 35, Citicorp 60%, ClarkEqp 26%, Coca Cola 44%, Colgate 483%, ContlData 29%, Crane 30, Digital 167%, Dome Mines 12%, Dow Chem 87%, DuPont 120%, East Kodak 88, Englhrd 26%, Exxon 91%, Firestone 42%, Fluor 17%, Ford 102, FrptMcmor 24%, Gencorp 102%, GenDyn 66%, GEC 55%, GM 83%, Goodyear 69%, Greyhound 41%, Grumman 26%, Gulfßes 15%, Heinz 493%, Haliburton 36%, Homestake 34%, Honeywell 84, IBM 166%, INCO 17%, ITT 58%, JandJ 92%, KMart 43%, Kraft 62%, Lockheed 52%, MMM 72%, Manville 3%, Mattel 10%,- McdonDoug 69%, Mcdonald’s 54, MerrLynch 36%, Mobil 503%, Monsanto 83%, Navistar 7%, NCR 77, NewmMin 46, Occidental 38%, Pfizer 73%, PhelDodge 36, PhilipsPet 16%, Polaroid 77%, Raytheon 77%, ReynMetal 75%, RoylDutch 129%, Schlumberger 44%, Seagrams 77%, SearsRoe 51%, ShellTr 90%, Texaco 37%, Texas 61%, UNCAL 37%, UnionCarb 30%, Unisys 126%, USX 31%, Disney 73%, Westinghouse 64%, Wool worth 54%, Xerox 78%.