NEW YORK -- Stocks declined yesterday in the slowest trading of the year as a rally in the bond market failed to inject life into the pre-holiday stock market.
The American Stock Exchange closed yesterday morning after a fire at a nearby building spewed smoke onto the trading floor.
The Dow Jones Industrial Average closed at 3,281.93, down 10.27, after a morning rally had pushed the Dow up a bit, to about 3,295. Trading was the slowest all year, with 126 million shares changing hands. Thursday's volume of 212.54 million shares had been nearly double yesterday's level, suggesting that many traders left early yesterday. For the week, the Dow rose 14.32 points.
"Today's trading wasn't indicative of anything, because there was no volume," said E.E. "Buzzy" Geduld, president of Herzog Heine Geduld. "We'll have to wait until Tuesday to see where the market's going."
Bond traders reacted favorably yesterday morning to reports that non-farm jobs had declined by an unexpected 83,000 in August, the largest drop since a loss of 146,000 jobs in November 1991. The news fueled speculation that the Federal Reserve would lower interest rates.
The stock market reacted differently to the figures. "The weak economy simply isn't good for profits," said John Blair, head of trading at County NatWest.
The Standard & Poors 500 Index finished at 417.08, down 0.9. The NASDAQ Combined Composite Index fell 1.44, to 573.44. Declining stocks led advancers by a margin of 7 to 6 on the Big Board.
Activity tapered off as traders left early for the Labor Day weekend, slowing the market by midday.
Retail stores, computer systems, semiconductors and chemicals were down the most in the S&P 500. Losses among the retailers were largely a carry-over from Thursday, when many reported disappointing same-store sales. The retail reports illustrated how weak the economy is, said John Burnett, a trader with Donaldson Lufkin & Jenrette.
General Motors, Glaxo Holdings, RJR Nabisco, and Costco Wholesale Corp were the most-active issues.
Costco, the most active, fell 1 3/4 , to 23 1/2 . The retailer's stock has been volatile on concerns about earnings.
General Motors, which announced salary and benefit cuts Thursday, is expected to reach agreement with striking United Auto Workers at its parts plant in Lordstown, Ohio. GM stock rose 1/4 , to 35.
RJR Nabisco Holdings was unchanged, at 8 7/8 . It recently agreed to sell its cereal business to General Mills.