STOCKS : Market Ignores Panama Crisis; Dow Dips 7.68

The stock market drifted through a trendless session Wednesday, registering no strong reaction to the U.S. military action in Panama.

The Dow Jones average of 30 industrials dropped 7.68 to 2,687.93, extending its loss over the past five trading days to 73.16.

But advancing issues nosed out declines in nationwide trading of New York Stock Exchange-listed stocks, with 759 up, 749 down and 492 unchanged.

Big Board volume declined to 176.52 million shares, down from 186.06 million Tuesday.

Analysts said investors were cautiously watching the situation in Panama, but apparently not viewing it as any cause to make big changes in their strategies.

They noted that the prospective economic effects of the confrontation, if any, remain unclear.

At the same time, brokers said, stock traders appeared to draw only brief encouragement from an upward revision in the latest government figures on economic growth.

The Commerce Department said the gross national product grew at a 3.0% annual rate, after adjustment for inflation, in the third quarter of the year, up from a previous estimate of 2.7%.

Economists’ projections for results in the fourth quarter and the early stages of 1990 remained gloomy.

Citytrust Bancorp, which became the latest Northeastern regional banking company to increase its reserves against bad loans because of a weak real estate market, fell 3 to 11. Citytrust also said it was eliminating its quarterly dividend.

Walt Disney tumbled 11 3/8 to 112 in selling attributed to recession worries and a warier appraisal by some analysts of the company’s earnings outlook.

Stride Rite dropped 3 3/4 to 23 1/2 on word from the company that its earnings for this year and next were likely to come in on the low side of estimates.

Late in the day, however, an investor group said it proposed to buy Stride Rite for $32 a share.

Helene Curtis Industries fell 3 5/8 to 25 3/4. The company reported earnings of 28 cents a share for its quarter ended Nov. 30, down from 40 cents in the 1988 period.

Among actively traded blue chips, American Telephone & Telegraph dropped 1 1/4 to 44 1/4; Philip Morris fell 1/4 to 40 1/8; McDonald’s dipped 5/8 to 32 7/8; International Business Machines edged down 1/8 to 94 5/8, and General Electric 3/8 to 62 3/8.

Rumors of a possible discount rate rise sent Tokyo Stock Exchange investors chasing incentives or scurrying to the sidelines as interest rates again dominated market talk. The 225-share Nikkei index added 72.90 to close at 38,512.00 after dropping 147.08 on Tuesday.

In London, shares ended firmer but came off the day’s highs as Wall Street weakened in morning trading in New York. The Financial Times’ 100-share index finished 18.6 higher at 2,360.7.

CREDIT

T-Bill Yields Drop; Bond Prices Mixed Treasury bill yields tumbled and bond prices were narrowly mixed after the Federal Reserve appeared to signal an easing of monetary policy.

The Treasury’s benchmark 30-year bond fell 3/32 point, or about 94 cents per $1,000 in face amount. Its yield increased to 7.84% from 7.83% late Tuesday.

The military action in Panama had little effect on the credit markets.

Bond prices normally rise in times of instability as investors transfer money to safe long-term fixed investments such as bonds.

Analysts said the Federal Reserve Bank of New York added reserves to the banking system. The action helped lower the federal funds rate, a key barometer of interest rates.

The federal funds rate, the interest banks charge each other for overnight loans, was quoted at about 8.25%, down from 8.50% late Tuesday.

CURRENCY

Dollar Rises Early, but Reverses in U.S. The dollar finished mostly lower in foreign exchange trading in the United States after ending mixed overseas in what dealers called a muted response to the military action in Panama.

Gold investors appeared to discard news of the military action, as prices edged higher in New York after falling in Europe and Asia. Republic National Bank in New York quoted a late bid of $413.05, up $1.30.

The dollar wound up lower against every major currency except the Japanese yen and Canadian dollar in New York. In Europe, it rose against the yen, Canadian dollar and Dutch guilder, but fell against other major currencies.

Dealers in Europe said the dollar rose early in the trading day in reaction to news of the U.S. military action in Panama.

But the dollar reversed course midway through the U.S. trading day when the Federal Reserve took steps to inject reserves into the financial system, a move that was viewed as a sign that it may be encouraging lower interest rates.

Falling interest rates reduce demand for dollars because the decline cuts the yields available to foreigners on their dollar-denominated investments.

Richard Levine, vice president for foreign exchange and precious metals at Elders Futures Inc. in New York, said trading was relatively light all day.

The subsequent decline in the dollar also came on low volume, Levine said, because traders remember that they misinterpreted a similar move by the central bank a few weeks ago as an indication it was easing its credit policy.

In Tokyo, the dollar rose to 144.23 Japanese yen from 143.80 yen at Tuesday’s close. Later in London, it was quoted at 143.90 yen. In New York, the dollar edged up to 143.93 yen from 143.65 yen late Tuesday.

The dollar fell against the British pound. In London, the pound rose to $1.6052 from $1.6005 late Tuesday. In New York, the pound rose to $1.6060 from $1.6010 Tuesday.

COMMODITIES

Orange Juice Higher on Fear of a Freeze Prices of orange juice futures climbed higher on the New York Cotton Exchange as fears of a weekend freeze in Florida intensified.

On other commodity markets, sugar futures fell sharply; coffee futures gained in reaction to the military action in Panama; precious metals advanced; energy futures were mixed; grains and soybeans fell, and livestock and meat futures retreated.

Futures prices for frozen concentrated orange juice settled 1.9 to 3.05 cents higher. The contract for delivery in January was up 2 cents at $1.3445 a pound.

Freezing temperatures are almost certain to reach Florida’s citrus region this weekend as one of the most powerful cold-air masses of the decade lumbers down from Canada, said Jon Davis, a meteorologist who tracks the impact of the weather on commodities for Shearson Lehman Hutton Inc.