Market Caught in Selling Wave; Dow Slips 13.86
NEW YORK — The stock market posted a broad loss for the second consecutive session Monday in selling ascribed to concern over inflation and the interest rate outlook.
The Dow Jones average of 30 industrials, down more than 30 points at midday, was off 13.86 at 2,258.66 by the close.
The average fell 52.97 on Friday.
Volume on the New York Stock Exchange came to 174.16 million shares, against 180.80 million in the previous session.
Analysts said traders were still concerned over signs that inflationary pressures might be picking up, sending interest rates higher.
On Friday, major banks raised their prime lending rates to 8.25% from 8%. As the new trading week began, there was widespread conjecture that the Federal Reserve would soon raise the discount rate, the charge it sets on loans to private financial institutions.
Among actively traded blue chips, Ford Motor dropped 3 1/8 to 90 3/4; General Electric declined 1 5/8 to 100 7/8, and American Telephone & Telegraph dipped 1/8 to 26 1/8. International Business Machines rose 3/8 to 161, and Coca-Cola was unchanged at 39 3/4.
The day’s most notable gainer was Harcourt Brace Jovanovich, up 16 1/8 at 46 5/8, on turnover of more than 3.2 million shares. British Printing & Communication said it proposed to buy Harcourt Brace for $44 a share.
The Treasury’s key 30-year bond was up point, while its yield dropped to 8.88% from 8.92% Friday. Corporate issues rose, while municipal bonds were unchanged to slightly higher.
The federal funds rate, the interest on overnight loans between banks, traded at 6.813%, down from 6.875% Friday.
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