Dollar’s Surge Unnerves Markets

Stocks veered lower in a volatile session Tuesday as the market coped with conflicting forces.

Uncertainty about the economic outlook and interest rates combined with worries about how much a strengthening dollar will impair the profitability of American multinational companies created a guarded atmosphere for stocks.

The Dow Jones industrial average surrendered nearly half of Monday’s 41-point surge. At its worst, the blue-chip barometer was down more than 40 points but late buying left it with a deficit for the day of 19.02, lowering it to 4,640.84.

Losers led the Big Board’s advance-decline tally by 6 to 5. Volume on the NYSE floor expanded to 330.04 million shares as of 4 p.m. Eastern time from 262.43 million shares on Monday.

Don Hays, investment strategist at Wheat First-Butcher & Singer, said while the bond market appeared to welcome the dollar’s revival, equity investors reserved judgment.

On the one hand, a stronger dollar could attract foreign money into the United States, tending to buoy stock prices. But earnings of some companies dependent on overseas business could suffer, he said.

Some of the stocks that moved substantially or traded heavily Tuesday:

NYSE

Broadway Stores, up 4-1/4 to 7-1/8.

The stock soared in the first trading since Federated Department Stores said it would buy the financially troubled chain in a transaction worth more than $1 billion. Federated fell 1-1/2 to 28.

Disney, up 3/4 to 59-3/4.

Wall Street kept the stock buoyant a day after the entertainment giant announced it had hired Michael Ovitz, co-founder and chairman of Creative Artists, as president.

AT&T, up 1/4 to 52.

The stock was a focus of attention as AT&T jumped into the Internet business, saying it will provide access to consumers nationwide next year.

NASDAQ

Advanced Circuits, up 6 to 22-1/8.

Stock of the semiconductor maker was bid up following news that the company received a takeover proposal from Johnson Matthey for about $170.2 million.

AMEX

PLC Systems, up 5/8 to 14-1/4 in heavy American volume of nearly 813,000 shares

The company signed an exclusive agreement with an affiliate of Imatron to distribute its Heart Laser and Heart Laser kit products in Japan.