Stock, Bond Markets Fall; Dollar Climbs
Bond prices dropped sharply today, hammered by persistent concern about a wave of new government issues flooding the market.</br></br>The stock market, buoyed initially by a strong dollar, succumbed instead to worries about the bond market's persistent weakness. The Dow Jones average of 30 industrials closed down 10.93 at 2590.57.</br></br>The Treasury's closely watched 30-year issue tumbled 1 5/16 point, or about $13 per every $1,000 in face value. That catapulted its yield, which moves inversely to its price, from 9.66 percent late Monday to 9.82 percent-the highest level since late 1985, according to analysts.</br></br>"Everyone's staying away from this market," said Mitchell Held, chief financial economist for investment firm Smith Barney, Harris Upham & Co. "It looks cheap now, but it could get cheaper." "The weakness in the bond market was the key to the whole day," said Larry Wachtel, analyst at Prudential-Bache Securities. "Stocks floundered through most of the day, not showing much pizzazz, and when you flounder all day, you go south in the last hour."</br></br>Investors continued to question whether the market could handle the onslaught of new bonds and notes to be offered as a result of President Reagan signing a bill this afternoon raising the national debt limit, analysts said.