DOW plunges 59 points as oil prices jump 8% Variety of stocks tumble to new lows

September 25, 1990|By New York Times News Service

NEW YORK -- New fears of war in the Middle East and a steep rise in the price of oil depressed stocks sharply yesterday, sending prices dropping to new lows in every important industry and every leading index.

The Dow Jones average of the 30 leading industrials fell 59.41 points, or 2.4 percent, to 2,452.97 -- its lowest level in 14 months.

In an unmistakable sign that the sell-off was exceptionally widespread, the broader Standard & Poor's average of 500 Big Board stocks fell 6.73, or 2.2 percent, to 304.59, a 16-month low.

With many traders, investors and speculators continuing to show skepticism about putting much money into the market, trading volume dropped to 162.2 million shares, from an abnormally heavy 201 million Friday.

About three-quarters of the 1,991 stocks traded on the New York Stock Exchange declined, with 444 plunging to new lows.

Among the new lows were Berkshire Hathaway, the most expensive stock on the Big Board and the main investment of Warren Buffett, an Omaha, Neb., billionaire. Berkshire fell $200 a share, to $5,825, after hitting a new low of $5,750.

Other lows were set by CBS and Loews, both huge investments of the Tisch family and of Laurence A. Tisch, a Manhattan billionaire.

CBS fell 2 5/8 , to 155, after reaching a new low of 153, while Loews fell 1 1/2 to 85 1/8 , after a new low of 85.

"The story's oil again; it's boring but it's oil," said Peter G. Grennan, senior vice president of Shearson, Lehman Brothers. "It has been oil, is oil and will be oil."

Other events are shaping thinking on the stock market, particularly the growing prospects for a recession, inaction on the budget deficit and deepening pessimism that interest rates can be reduced any time in the next few months.

"Whether we have a mild recession or something more serious," Mr. Grennan said, "most likely will hinge on the price of oil."

While acknowledging first that "oil's up again," Michael Metz, chief market analyst for the Wall Street firm of Oppenheimer & Co., argued that "the Fed's in a box," adding, "It's unable to ease money despite the slow economy for fear of inflation."

"Tensions are heightening in the Persian Gulf, and there's considerable anxiety that it means war," he said. "In that environment, discretion is the better part of valor and market participants are choosing not to participate."

Like the Big Board, where the top 10 stocks all declined, the top 10 on NASDAQ all declined. MCI, the long-distance phone company, topped the list, falling 1 3/4 to 29 3/4 , a new low, on 1.9 million shares.

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