Dow Recovers From Steep Slide, Closes Lower
The stock market bailed out of steep losses twice on Friday to ended marginally lower, as bond and currency prices were whipsawed by events in Washington.
Blue chip stocks recovered the most. The Dow Jones industrial average, off as much as 38 points, finished down 3.25 to close at 4,764.15. Declining issues led advancers by more than 2 to 1 on the New York Stock Exchange, where volume was moderately heavy at 370.79 million shares as of 4 p.m. compared with 367.02 million on Thursday.
Stocks and bonds dropped sharply at the opening, responding to an early Commerce Department report that American businesses plan to increase their investment in plants and equipment by 9.4 percent this year, the fourth straight annual advance.
Analysts concluded from the Commerce Department survey that the economy was too strong to warrant a lowering of interest rates by the Federal Reserve at its policy meeting Tuesday.
Stocks and bonds trimmed their losses after Alan Greenspan, the chairman of the Federal Reserve, told the Senate Banking Committee that the risks of inflation and recession have lessened. That prompted some speculation that the Fed would in fact ease credit.
Stocks also were pressured by worries about a possible deadlock between Congress and the White House on financing the government and authorizing continued federal borrowing in the fast-approaching fiscal year, which begins Oct. 1.
In addition, stocks reacted to the volatile dollar, which started the day lower but recovered later.
Some of the stocks that moved substantially Friday:
NYSE
American Standard fell 1-3/8 to 30.
The company increased a common stock offering to 22.5 million shares from an originally planned 17.5 million, and priced them late Thursday at $30.25 per share.
Wolverine Tube fell 1-7/8 to 38-1/4.
The company priced 4.88 million common shares late Wednesday at $39 apiece and said it would take a $700,000 pretax charge on the sale.
Time Warner rose 7/8 to 40-5/8.
After weeks of negotiations, Time Warner agreed to buy Turner Broadcasting Inc. in a $7.5 billion stock swap.
NASDAQ
Arakis Energy fell 5-3/4 to 6-1/4.
The company said several class-action suits have been filed in the United States against the company and certain of its officers and directors, in connection with Arab Group’s financing agreement with Arakis, which was terminated earlier this week.
Work Recovery fell 1-1/8 to 2-7/16.
The Securities and Exchange Commission has begun a formal investigation of the Tucson, Ariz., company, which provides rehabilitation services, The Wall Street Journal reports.
Creative Technology rose 1-1/8 to 14.
Dakin Securities commenced coverage of the Singapore company’s stock with a “buy” rating, citing a sound core business in multimedia products.
AMEX
Turner Broadcasting “B” fell 1/4 to 28-7/8.
Turner Broadcasting “A” rose 1/8 to 28-7/8.
Time Warner agreed to buy Turner in a $7.5 billion stock swap.