Reagan told 108-point fall just a correction

Press, 19 October 1987, Page 16

Reagan told 108-point fall just a correction

NZPA-Reuter Washington President Reagan said on Saturday he had been told the precipitous fall in Wall Street stocks last week was just the market correcting itself. Share prices plunged on Friday in frenzied trading that led some analysts to predict the long bull market had finally ended. The Dow Jones index of 30 leading industrial stocks lost 108.36 points, a one-day record, or 4.6 per cent of its value, on Friday to close the day at 2246.73. The index fell 235.48 points in the week, a record for one week, or nearly 10 per cent. Reagan was asked about the market on his return to the White House from Bethesda Naval Hos-

pital where his wife, Nancy, had surgery for breast cancer. After expressing some surprise at the change of subject following a series of questions about Mrs Reagan’s health, he replied: “Well, they tell me it’s just a correction.” US Treasury Secretary James Baker said on Saturday the record-setting fall in stock prices was not the start of a recession. Friday’s feverish selling knocked down nearly every share price in a sell-off that rewrote the record books. The scary plunge in share prices that accelerated as the afternoon wore on evoked other plunges, days that touched off financial panics and hard times. More than 338,480,000 shares changed hands in the busiest trading day ever on the New York Stock Exchange. The rout, amounting to 4.6 per cent of the Dow, was the biggest point decline in a single day, surpassing Wednesday’s 95.46-point drop. In percentage terms, however, the decline was only a third as big as the crash of 1929 that ushered In the Great Depression. The market has shed 470 points since August 25, when it peaked at 2722.42. Up to now, Wall Street analysts had labelled the decline an overdue correction that

would be followed by an advance, but an increasing number of professionals now say the market has the characteristics of an early bear market "The bull is dead,” said one veteran. On Thursday, the market took another drubbing in a late wave of selling following Wednesday’s re-cord-breaking drop. The Dow Jones average of 30 industrials plunged 57.61 to close at 2355.09, extending its loss over the previous two sessions to 153.07 points. It was the fifth biggest point loss ever. Declining issues outnumbered advances by nearly 5 to 1 on the New York Stock Exchange, with 289 up, 1431 down and 303 unchanged. Volume reached 263.18 million shares, against 207.35 million in the previous session. On Wednesday, the Dow Jones average of 30 industrials fell 95.46 to close at 2412.70, for a loss of 3.81 per cent, surpassing the previous record point decline of 91.55 set on October 6. The biggest percentage drop ever recorded by the average was 12.82 per cent on October 28, 1929. Declining Issues overwhelmed advances by more than 5 to l .on the New York Stock Exchange, with 273 up, 1393 down and 330 unchanged. Volume totalled 207,35 million shares, against

172.87 million in the previous session. As the market opened, the Commerce Department reported the U.S. trade deficit amounted to 5U515.68 billion in August The stock market had swung upward on Tuesday in what analysts described as a technical rebound after its steep drop of late. The Dow Jones average of 30 industrials, down 169.55 points over the six previous sessions, recovered 36.72 to close at 2508.16. Analysts said the market had fallen far enough in recent sessions that it began to attract buyers who had been waiting for a pullback. . / Gloom had become so widespread, . analysts argued, that the market was due for at least a temporary bounce. The market had declined broadly on Monday, picking up where it left off in the previous week’s steep drop. The Dow Jones average of 30 industrials dropped 10.77 points to close at 2471.44. The relatively slow pace of activity was attributed largely to the absence of many traders taking Columbus Day off. But holiday or not, analysts said the market was having trouble attracting buyers, given its poor recent performance