
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, April 5, 1994                   TAG: 9404050163
SECTION: BUSINESS                    PAGE: B-8   EDITION: METRO 
SOURCE: Associated Press
DATELINE: NEW YORK                                LENGTH: Medium

TRADERS WORRY, WORRY, WORRY AND STOCKS FEEL THE SHOCKS

Stocks dropped to a six-month low in volatile trading Monday, shaken once again by rising interest rates and by last week's better-than-expected report on employment.

Share prices, however, recovered from their worst levels for the day. The Dow Jones industrial average was down almost 84 points at one point in the session, while the Nasdaq composite index lost about 20 points.

Stocks slid as long-term bond prices fell more than 11/2 points and the yield on the 30-year Treasury jumped to 7.42 percent. The 30-year treasury has lost more than 3 points since Friday.

``It's a combination of the shock of bonds losing 2 points on Friday, concern interest rates will go up, up and away, and damage from the last five trading days,'' said Alfred Goldman, director of technical market analysis with A.G. Edwards & Sons.

The Dow lost nearly 139 points last week, or 4 percent.

Later, the decline in bond prices, only modest at the opening, gathered speed and stocks followed suit. The selling was not based on any one event, analysts said.

``The fact is, there has been no buying,'' said Steven A. Wood, an economist at BankAmerica Capital Markets Group. ``Enough players have viewed the market's action as an opportunity to sell out of positions.''

As has happened on several occasions lately, twice during the day the NYSE exchange's so-called ``uptick'' rule was triggered, placing restrictions on a form of computerized trading known as index arbitrage.

Later, a so-called sidecar procedure that gives small investors preferential treatment in selling stocks also took effect - for the first time since Oct. 5, 1992.

Both measures were implemented after the 1987 market crash in an attempt to slow hectic trading.

Bond and stock prices were tumbling amid speculation the Federal Reserve might seize on Friday's strong employment report to raise interest rates for the third time this year.

Woolworth lost 21/8 to 13 amid word the retailer's chairman and chief financial officer have temporarily stepped aside while Woolworth conducts an investigation into alleged accounting irregularities.

In Nasdaq trading, Sun Microsystems lost 53/8 to 22. The company said after trading Thursday that revenues for the third quarter ended March 27 were below analysts expectations. Merrill Lynch and PaineWebber cut ratings on the stock.

by CNB