Wall St halts slide

Press, 3 December 1987, Page 31

Wall St halts slide

PA New York Central Bank intervention helped halt a slide in the U.S. dollar on Tuesday (early yesterday morning, N.Z. time) and the bruised stockmarket partly recovered. But, traders described the stabilisation as temporary. The Dow Jones industrial average, down more than 76 points at one stage in a selloff reminiscent of the October crash, recovered more than a third of the loss in early trading but ended with a gain of only 8.79 at 1842.34. Brokers attributed some of the recovery to the stabilised U.S. dollar, which had hit record lows Monday in reaction to waning confidence in the United States resolve to trim its massive budget deficit. The stabilisation was

largely because of massive dollar buying by central banks in Japan and Western Europe. But brokers said much of Wall Street’s rebound was superficial and the underlying concerns of investors remained pervasive. “There was no real buying and the volume was light,” said Ronald Doran, head of institutional trading at the First Albany Corporation Brokerage. "We need something else.” In London, equities stood mixed but with a mostly firmer bias in late London trading and, as expected showed no reaction to the early rise on Wall Street dealers said. The slight upturn came or the back of a firmer U.S dollar, ’Whlfcb ■ whd supporter

by an early co-ordinated round of intervention by major central banks, but investors are still very worried over the future trend of the U.S. currency. The FTSE 100 share index was up 8.9 points to 1588.8, recovering modestly from g Monday’s sharp selling on the " dollar’s weakness. Share f volume was 292.8 million, e well down on trading business n before the October share >. crash. Foreign exchange dealers d say support for the dollar is y likely to remain in place at n least until tomorrow. The 1, Bundesbank Mil make a decie. sion then on a possible cut in t, the West German discount rate. in However, underlying isentiS. ment for the U.S. currency sd remains bearish "