Dow off 12 points in 3rd losing session

March 29, 1994|By Bloomberg Business News

NEW YORK -- U.S. stocks closed lower yesterday for the third straight session as evidence pointing to stable interest rates failed to rally the market.

Stocks recouped some of yesterday's losses in the final hour. The Nasdaq market, which set a record 10 days ago, fell the most.

"The long bond being up over 7 percent has shaken people's confidence," said Barry Berman, head trader at Robert W. Baird & Co.

Investors were disappointed that Treasury bonds didn't rally more in the face of plunging crude oil prices, a key component of inflation, traders said. Crude for May delivery fell $1.05 a barrel, to $14.08, after the Organization of Petroleum Exporting Countries failed Saturday to agree on a production cut. The decision is expected to keep oil prices low.

"Lower oil prices should be good for inflation and good for the bond market," said Jim Benning, a trader at BT Brokerage. But the stock market's failure to respond more convincingly caused some people to question whether the 3 1/2 -year-old bull market is nearing an end.

The Dow Jones industrial average closed down 12.38, at 3,762.35, after falling as much as 45.77 this morning. Caterpillar Inc., Chevron Corp., AlliedSignal Inc., and Texaco Inc. led the decline.

The Dow Jones utilities average, considered by some to be a harbingerfor interest rates, rallied 3.29, to 205.44. The average has been hovering at a two-year low in recent weeks.

"People will point to that [rally in utilities] and say it has some significance, but I don't think so, unless it holds the gains for more than a day," said William Lord, vice president of equity trading at UBS Securities Inc.

Among broader indexes, the Standard & Poor's 500 Index closed down 0.58, at 460. The Nasdaq Composite Index slid 10.95, to 772.50. It set a record close of 803.93 March 18. The American Stock Exchange Market Value Index tumbled 6.22, to 462.21.

Thirteen stocks fell for every five that rose on the New York Stock Exchange. Trading was less active than usual, with about 287 million shares changing hands on the Big Board. Meantime, the yield on the benchmark 30-year Treasury bond is hovering a few basis points below Friday's close of 7.01 percent, its highest level in 10 months.

The Dow industrial average now stands 5.4 percent below its record close of 3,978.36, set Jan. 31. This is the longest bull market in history during which the Dow industrials haven't fallen 10 percent.

Oil stocks led the decline. Exxon Corp. fell 50 cents, to $65; Chevron fell $1.25, to $88.25; Mobil Corp. declined 75 cents, to $77.50. Texaco closed down $1.125, at $64.75; Royal Dutch Petroleum Co. went down 87.5 cents, to $100.875; and Pennzoil dropped 62.5 cents, to $52.50.

xTC UAL Corp. rose $1.75, to $133.25. The parent of United Airlines signed a definitive agreement Friday to sell a majority stake to an employee group in return for wage and benefit concessions.

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