Stock prices this morning -- the 900 level of the Dow Jones Industrial Average -- only to retreat during the last hour-and-a-half of heavy trading.
The Dow average of 30 stocks ended the day down imperceptibly at 897.27. The Dow closed at 897.35 Tuesday after traders made several unsuccessful attempts to top the 900 level.
Jerry Hinkle, head of tradining at Sanford C. Bernstein & Co., said there has been substantial resistance among investors to buy when stocks near the 900 level, but said the market is "working through most of that resistance."
Many investment programs are geared toward purchasing stocks when prices fall to a certain level -- when the Dow nears 800, for example -- and to selling when prices rise to another point such as 900.
But in recent days stock prices have surprised analysts by their strength. Most had anticipated that a two-month rally in prices would be followed by a "consolidation," or a decline in price to about the 850 level. Instead, stock prices have shunned any sustained decline.
Hinkle said that many big institutional investors, such as mutual funds or pension funds, are "reluctant to jump in at these levels when they missed buying in several points ago." However, he noted, as the market continues to remain strong, fewer and fewer investors are selling. "There's an old saying, 'You can't fight the tape,'" he said.
Bond prices, which remained stable in light trading today, fell slightly near the end of the day, after the Federal Reserve entered the money markets twice to absorb bank reserves. The action kept the federal funds rate -- the interest banks charge each other for overnight loans of excess reserves -- from falling below 8.25 percent.
The policy-making Federal Open Market Committee met today, but analysts said that any change in Federal Reserve policy would not be apparent until Thursday and did not attach any significance to today's Fed activities.
While trading in the bond markets was slow, trading in stocks was strong. On the New York Stock Exchange, 52.3 million shares changed hands, up from 45.8 million on Tuesday.
Automobile stocks were strong, in large part because of the Carter administration's announcement Tuesday that it would take steps to aid the flailing industry.
Despite the slight decline in the Dow average -- at one point during the day it had been up more than 7 points -- there were 829 issues on the NYSE that closed up and 672 that closed lower.
The NYSE composite index of its stocks, a broader gauge of trading than the Dow average, closed up 0.09 to 67.46. On the American Stock Exchange, the average closed down 1.32 at 307.27.
Analysts said that two business developments should help determine stock market behavior over the next week:
Ford Motor Co. meets Thursday to decide its quarterly dividend, which is expected to be cut to as low as 25 cents a share from $1 because of big losses at the automaker.
Friday, International Business Machines will announce its second-quarter earnings.