The Dow Jones Industrial Average pierced the vaunted 1,000 barrier today but could not hold on.
After climbing about 1,000 about 11:15 a.m., the Dow average fell back in the early afternoon but danced close to 1,000 until 3 p.m. when buyers gave up for the day.
The most closely watched stock market barometer, which measures the prices of 30 of the nation's most widely owned and biggest corporations, sagged in the final hour of trading to 991.04, down 6.91 points from its Tuesday close of 997.95.
Although the 1,000 level has an almost mythical aura to it the market has been there before. In November 1972 the Dow closed about 1,000 for the first time and climbed as high as 1,051 in January 1973 before sliding precipitously for the next few years. Again, in the weeks after Jimmy Carter's election in 1976, the Dow climbed about 1,000. Until today, the Dow average had not been above 1,000 since New Year's Eve 1976.
In 1972, there was hysteria on Wall Street when the Dow crossed 1,000. In 1976, there was glee.
Today there was little reaction at all. It was a busy day on the New York Stock Exchange -- the fifth busiest in history -- so there was hustling and bustling all day. "But I didn't hear a single shout when it hit 1,000," said one stock exchange employe.
Even if the Dow Jones average could not hold the 1,000 level today "it will soon," according to Marvin Katz of the brokerage house Sanford C. Bernstein & Co. "We'll break a thousand, then build a base for" a climb to 1,050 or more, Katz said.
Much of the recent climb in the Dow average -- it has risen nearly 55 points since Nov. 3 -- has been attributed to investor happiness with the election of Ronald Reagan as president. But the rally began back in April. eSince mid-April the Dow average has climbed nearly 230 points, or about 30 percent.
Katz said the decline today came after most buyers had completed their plans. "Then selling took over" as investors decided to cash in on the profits they could make from selling stocks that had appreciated sharply in the past month.
"But that's healthy," Katz continued. "The market will move down a little farther, probably, then snap back."
Trading volume was extraordinarily heavy today, as it has been since the election. Four of the five busiest days in New York Stock Exchange history have occurred in the past two weeks, with the busiest day ever on Nov. 5. About 69.8 million shares of stock changed hands today. On Tuesday, the fourth-most-active day ever, 70.4 million shares changed hands.
The stock market dealt with mixed news today. On the positive side -- from investors' perspectives, at least -- Federal Reserve Chairman Paul A. Volcker told a congressional subcommittee that he could support a tax cut to aid investment so long as there were commensurate cuts in federal spending. On the negative side, the Agriculture Department reported that food prices will rise about 12.2 percent next year compared with an anticipated 8.7 percent increase this year.
But outside news appeared to have little impact on stock prices. The market had its own internal dynamic today: early buying pressure that pushed the Dow Jones average to 1,009.39 and late profit-taking that pushed it down to 991.04.
By the end of the trading day on the NYSE, the number of stocks that closed down outnumbered those with higher closing prices by 891 to 707.
On the American Stock Exchange, the index was down 2.26 points to 355.72, with 294 stocks closing higher and 355 closing lower.
International Business Machines, closed down one point to 71 3/8, even though an appeals court upheld a verdict in IBM's favor in a case brought against it by Memorex. Memorex closed down 3/8 to 14 1/8.
Pacific Lumber, which proposed to shareholders a 2-for-1 stock split, gained 3 3/8 to 57. Most oil companies, which have been stellar performers since the spring, closed off today.
Aluminum companies -- Aluminum Co. of America, Alcan Aluminum and Reynolds Metals -- also closed off. Alcoa today announced a price increase on many of its products.