Stocks Decline in Slower Trading As Profit-Taking Ends 3-Day Rally
NEW YORK -- The stock market turned lower after three days of gains, with volume on the New York Stock Exchange shrinking by 16% from the previous day.</br></br>The lethargic session, analysts and traders said, showed that the 61.35-point jump in the Dow Jones Industrial Average the previous three days probably wasn't the start of a long rally. The industrial average fell 11.92 yesterday to 2141.71 as investors continued to take profits on the gains made early in the week. That tendency had begun to show up Wednesday, when the average rose only 4.27 points after a two-day advance totaling 57.08.</br></br>Soviet leader Mikhail Gorbachev's visit and other developments early in the week lifted the financial markets. But as Mr. Gorbachev cut short his New York visit and rushed home yesterday to deal with the effects of a serious earthquake in Armenia, bearish factors such as the U.S. budget deficit and possibly rising interest rates were back on center stage.</br></br>Stock-index futures traders, meanwhile, continue to insist that the stock market won't really boil until the 280 level on the Standard & Poor's 500-stock index is broken. They had hoped that would happen yesterday. But the index, which had been rising strongly in recent days, never got above its opening level of 278.13. It closed at 276.57, down 1.56.</br></br>"Stocks are at a stopping point here for a few sessions, based on a normal easing of momentum," said A.C. Moore, director of research at Argus Research in New York. "There could be a pullback of 20 to 40 points (in the industrial average) over the next few days before it goes higher."