Dow Slumps 3.75; Investors Watchful of New President

NEW YORK —  The stock market showed some scattered losses today, biding its time through the change of command in Washington.

The Dow Jones index of 30 industrials slipped 3.75 to 2,235.36, closing out the week with a net gain of 9.29 points.

Declining issues outnumbered advances by about 7 to 6 on the New York Stock Exchange, with 659 up, 767 down and 515 unchanged.

Big Board volume totaled 166.10 million shares, against 192.03 million in the previous session.

The NYSE’s composite index lost 0.09 to 161.16.

Analysts said the market had benefited in recent weeks from increasing expectations for George Bush’s presidency.

But by about midday on Thursday, they said, the mood among investors began to change from anticipation to watchful waiting.

The market’s recent rally stalled when the Dow moved close to 2,250--about the level where it stood on Oct. 16, 1987, just before the crash on Black Monday.

Brokers said that could turn out to be something of a psychological barrier for investors.

Bond prices were mixed in early trading today.

By midday, the Treasury’s closely watched 30-year bond fell 5/16, or about $3.12 per $1,000 face amount. Its yield, which moves inversely to its price, rose to 8.87% from 8.84% late Thursday.

“There’s a consolidation of the rally going on,” said Philip Braverman, chief economist for Irving Securities Inc.

He said the traders continued to keep an eye on the dollar, which weakened following reported central bank intervention today and Thursday.

“It’s astonishing it’s (the bond market) not a lot weaker given the relentless pounding the central banks have been giving the dollar,” Braverman said.

A weak dollar usually hurts bond prices because it makes dollar-denominated securities less attractive to foreigners and rekindles inflation fears by making imports more expensive.

In the secondary market for Treasury bonds, prices of short-term governments were unchanged to down 1/16 point, intermediate maturities fell between 1/32 point to 3/32 point, and long-term issues were down from 7/32 point to 5/16 point, according to Telerate Inc., a financial information service.

The movement of a point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.

The Shearson Lehman Hutton daily Treasury bond index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, fell 0.93 to 1,138.28.

In corporate trading, industrials were up marginally. Moody’s investment grade corporate bond index, which measures price movements on 80 corporate bonds with maturities of five years or longer, rose 0.02 to 298.32.

Yields on three-month Treasury bills rose to 8.49% as the discount rose 1 basis point to 8.21%. Yields on six-month bills were unchanged at 8.72% as the discount remained at 8.25%. Yields on one-year bills rose to 8.89% as the discount rose 2 basis points to 8.23%.

A basis point is one-hundredth of a percentage point. The yield is the annualized return on an investment in a Treasury bill. The discount is the percentage that bills are selling below the face value, which is paid at maturity.

The federal funds rate, the interest on overnight loans between banks, was quoted at 8 15/16%, down from 9% late Thursday.