Industrial Average Falls 7.33 Points Amid Renewed Interest-Rate Fears
A feeble attempt to extend Tuesday's rally quickly faded early yesterday and the stock market slid for the remainder of the relatively slow trading session.</br></br>Interest-rate worries returned to take their toll as they have in several recent sessions. Martin Feldstein, chairman of the president's Council of Economic Advisers, said he expects a further rise in interest rates, especially short-term rates, by year-end. The rate on federal funds, or interbank loans, ranged between 8 3/4% and 9 1/2%, compared with the prior day's average of 9.49%.</br></br>The Dow Jones Industrial Average, up 4.40 points Tuesday, rose an additional 1.88 points in yesterday's first half hour. But the index then began ebbing and closed at 1130.97, off 7.33 points and slightly above the 1984 low of 1130.55 reached April 5. The transportation indicator also fell, but the utility average ended up.</br></br>Losing issues on the New York Stock Exchange exceeded gainers by about 3-to-2. On Tuesday the gainers were slightly ahead, interrupting seven consecutive sessions in which losers outnumbered gainers. That was the longest such losing streak since late 1982.</br></br>"Upside potential is constrained by high interest rates and growing fears that inflation will heat up, asserted John R. Groome, senior vice president at U.S. Trust. "However, corporate America has learned to cope with persistently high rates, and the economic expansion is intact." He added that "investors' present belief that the level and direction of rates is practically the only determinant of stock prices could gradually dissipate as they realize that earnings and dividends will continue upward."