Newspaper article THE JOURNAL RECORD

Stock Market Drops Sharply

Newspaper article THE JOURNAL RECORD

Stock Market Drops Sharply

Article excerpt

NEW YORK (AP) - The stock market dropped sharply Tuesday as an upward trend in worldwide interest rates troubled traders.

The Dow Jones average of 30 industrials lost 38.74 points to close at 2,596.85. At one point during trading the widely watched barometer was down nearly 50 points.

Declining issues outnumbered gainers by about 4 to 1 in nationwide trading of New York Stock Exchange-listed stocks, with 327 up, 1,257 down and 388 unchanged.

Big Board volume totaled 147.3 million shares, down from 166.8 million in Friday's session. The market was closed Monday for Presidents Day.

Nationwide, consolidated volume in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 174.97 million shares.

Analysts said the tone for the session was set by rising interest rates in Japan and West Germany as U.S. traders returned after the three-day weekend.

U.S. interest rates followed the trend, rising sharply. Prices of long-term government bonds plunged as much at $16 for each $1,000 in face value, increasing their yields to the 8.66 percent-8.7 percent range.

Besides higher overseas rates, traders said the bond market was depressed by news that the Treasury raised its first-quarter borrowing needs by $6 billion.

Upward pressure on worldwide interest rates has been widely cited as a primary force behind the stock market's poor performance so far this year. Higher rates make interest-bearing investments more attractive than stocks and deter the Federal Reserve from stimulating the domestic economy.

Fed Chairman Alan Greenspan told Congress Tuesday that recent U. …

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