Rapid Wall St drop

Press, 23 September 1987, Page 42

Rapid Wall St drop

NZPA-Reuter New York Stocks fell sharply on the New York Stock Exchange on Monday (early yesterday, NX time), in a nervous sell-off incited by a downward reversal in the bond market and mounting fear that interest rates will continue to climb. The selling accelerated late in the day when a wave of arbitrage related programmes sent the Dow Jones industrial index below 2500 points. In its fifth straight declining session, the index

of 30 industrials fell 32 points to close at 2493. It was the first time the index closed below 2500 since late July, prompting some technical analysts to predict that it could fall another 70 to 80 points before finalising the correction that has gripped the market since the end of August The correction has sent stock prices down about 230 points or more than 8 per cent since August 26. In the last five sessions, the market has fallen 120 points.

On Monday declines led advances by better than two-to-one on volume of 170 million shares. The selling began at mid-afternoon when the

bond market backed away from its early gains, reminding investors that their interest rates concerns remain. “It is that lingering worry that yields are going to continue to go much higher,” said analyst Hildegard Zagorsk! of Prudential-Bache Securities.