Stock Market Weathers Volatile Trading to Close Almost Where It Started

Displaying remarkable resilience, the whipsawed stock market Wednesday weathered wave after wave of bad news--especially about the falling dollar--before finishing another volatile trading day virtually where it started.

The Dow Jones industrial average ended the day up slightly, 0.33 points, to 1,846.82, after rising 52 points on Tuesday. Trading once again was brisk. The New York Stock Exchange had its eighth-busiest day, with 279.41 million shares changing hands.

The modest increase in the closely watched Dow gauge of blue chip stocks masked a 63-point nose dive at the opening and a 108-point swing, both of which had traders and market analysts on tenterhooks.

“A lot of people were braced for a very bad day,” said Jerry Helzner, a market strategist for the Philadelphia investment firm Butcher & Singer. “So, for this market to end even in the face of a very bad news backdrop and another day of distress selling is impressive.”

Like Helzner, Dreyfus & Co. market strategist Monte Gordon thought Wednesday’s market “demonstrated encouraging resilience” and an orderliness unseen on Wall Street since the historic Oct. 19 crash, which wiped out $500 billion of the market’s value in a single day.

Stocks opened quicker and smoother than they have in days, and the gyrations--with the exception of the 108-point swing in the Dow--were more in check.

Many analysts also were heartened by word that a treasured seat on the New York Stock Exchange sold Wednesday for $750,000--up $125,000 from the last sale, on Oct. 6.

But Gordon also warned that the stock market is still a precarious place to be, as evidenced by the fact that declining Big Board issues overpowered advancers about 2 to 1.

Broader market measures also turned in mixed performances for the second straight day. And smaller stocks--as measured by indexes for the American Stock Exchange and the NASDAQ over-the-counter market--suffered another day of heavy selling and losses as individual investors continued to dump stocks in order to meet margin calls.

“Once again, the blue chips led the rally,” Helzner said. “But as is often the case when you have a very frightened market, it didn’t spread to the smaller stocks, some of which are in a shambles.”

The battering that hundreds of smaller stocks have suffered since Oct. 19 took its toll Wednesday on another small brokerage--Haas Securities Corp. The New York firm, which managed about 12,000 customer accounts, was forced to close its doors because of losses suffered since the 508-point Dow plummet last week, the New York Stock Exchange said.

L. F. Rothschild & Co., which was the clearing broker for Haas and has been stunned itself by the market turmoil to the tune of about $44 million, said it doesn’t anticipate “any significant exposure” arising from the Haas failure.

Stocks were poised for a big fall Wednesday following sharp declines abroad amid renewed concerns about the value of the dollar. By 9:30 a.m. in New York, the dollar had sunk to new lows against both the West German mark and the Japanese yen.

True to form, the U.S. market did open lower--tumbling 63 points in the first 30 minutes of the session. But traders said most of the early sell orders were from overseas investors; whereas many U.S. investors quickly began responding not to the bad news overseas but to a mild rally in the dollar’s value against foreign currencies that coincided with Wall Street’s opening.

“The dollar was beginning to stabilize just as New York opened, giving this market its least bad opening of the last few awful sessions,” said Trude Latimer, a market strategist for Josephthal & Co. in New York.

A firming dollar and rumors that the British government’s impending sale of its stake in British Petroleum might be scrapped set the stage for a mid-session rally led by technology stocks and other blue chip issues. Two hours after the opening, the Dow had fully recovered its losses and was in the black by 35 points.

Waning Interest

“I saw more large-block buying today than I have in many days, and some portfolios were buying individual stocks,” Latimer said. “Yesterday there were nibbles; today there were small bites.”

The convulsive rally faltered, though, once it became clear that the broader market couldn’t keep pace and the dollar couldn’t gain strength even with intervention from the Federal Reserve Board and central banks overseas.

There also was growing conviction throughout the day that the British Government would not cancel the British Petroleum offering despite waning interest from investors and deepening concern in the United States that the unleashing of such a huge amount of stock would further batter an already bruised U.S. stock market.

The market’s final fling with disaster came with only minutes to go in the shortened session. After European Community Commission President Jacques Delors told the European Parliament that the United States may let the dollar’s value plunge to a low 1.6 German marks, the dollar took a nose dive amid frantic trading and the U.S. stock market plunged in sympathy.

But yet again it fought back--to end the day marginally up.

Among actively traded blue chips, American Telephone and Telegraph rose 1 1/8 to 28 5/8; Dow Chemical gained 1 5/8 to 66; International Business Machines was unchanged at 118, and Exxon was down 2 to 40 3/4.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 315.86 million shares.

In London, stock prices fell Wednesday but finished well above the session’s lows after a late rally. The Financial Times 100-share index, down 105 points at one time, closed down 44.9 points, or 2.6%, at 1,658.4.

Stock prices also declined sharply this morning in Tokyo. The 225-share Nikkei stock average, which fell 257.43 points Wednesday, lost another 297.31 points, or 1.3%, to finish the morning session at 22,280.22.

“The U.S. dollar’s fall is the biggest contributing factor to the declining stock prices,” said Michio Katsumata of Nomura Securities, a major Japanese brokerage house.