Dow Drops 14.63 More; Campeau Sparks Jitters
NEW YORK — Stock prices fell again today in a carry-over of selling from Wednesday afternoon.
The Dow Jones average of 30 industrials dropped 14.63 to 2,664.89, bringing its loss over the last two sessions to 42.37 points.
Declining issues outnumbered advances by nearly 3 to 1 on the New York Stock Exchange, with 387 up, 1,112 down and 459 unchanged.
Big Board volume totaled 149.25 million shares, down from 175.33 million in the previous session.
The NYSE’s composite index lost 1.33 to 190.96.
Analysts said the market remained unsettled by recent pressure for high-yield junk bonds of companies carrying large debt loads.
The worries focused on the problems of Campeau Corp., which is trying to restructure its retailing empire to keep up with its debt obligations.
Whatever the outcome of Campeau’s efforts, observers said, its problems clouded prospects for new debt-financed acquisitions by other bidders in the immediate future.
Brokers also noted that traders were proceeding cautiously in advance of the quarterly “triple witching hour†involving a series of expiring stock-index options and futures.
The government report this morning that retail sales increased 0.7% in August provided some support for U.S. Treasury securities, nudging interest rates a bit lower in that sector of the credit markets.
But stocks got little benefit from those developments.
The credit market staged a comeback this morning from a setback Wednesday sparked by jitters about junk bonds, a declining dollar and foreign interest rate increases.
Prices of government securities benefited from an unexpectedly weak report on retail sales.
The Treasury’s benchmark 30-year bond recovered 11/32 point, or nearly $3.75 per $1,000 face amount. Its yield, which falls when prices rise, declined to 8.10% from 8.14% late Wednesday. The bond had lost about $5 per $1,000 in face amount Wednesday.
Peter Greenbaum, an analyst at Smith Barney, Harris Upham & Co., said this morning’s rally in Treasury bonds “really was driven by the retail sales figure.â€
The corporate bond market, rocked Wednesday by jitters about the financial stability of some corporate issuers of high-yield, high-risk junk bonds--particularly Campeau Corp.--steadied today.
The federal funds rate, the interest on overnight loans between banks, was quoted at 8 7/8%, compared to 8 13/16% late Wednesday.
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