The Dow Jones Industrial Average, which edged over the 1,000 barrier at the close of Thursday's trading, could not maintain the symbolic level today.
The Dow average of 30 big and widely owned stocks closed down 10.24 points today to 989.93. On Thursday the Dow average closed above 1,000 for the first time in nearly four years -- but just barely, at 1,000.17.
Stock prices rallied briefly at the opening bell on the New York Stock Exchange, then faded steadily for the rest of the day as investors sold stocks to lock in profits they have realized in the last few weeks and as the specter of rapidly rising interest rates put a damper on the economic outlook.
Major banks boosted their prime lending rates to 17 percent today, and analysts expect rates to go higher. There is a growing fear that the skyrocketing rates could snuff out the apparent economic recovery.
Marvin Katz of Sanford Bernstein & Co., a major brokerage firm that does trading mainly for big institutions such as pension funds said the sell-off today "was very healthy. The stock market is starting to build a base around the 985 to 1,000 level (on the Dow Jones) and will trade in that range for the next five to 10 business days. The next step is 1,025, then 1,050, the historic high for the Dow."
The Dow average, probably the most-closely-watched index of market performance, hit 1,051 in January 1973.
Since the election of Ronald Reagan on Nov. 4, the Dow Jones average has climbed from 935 as ebullient investors felt his election would be good for them. The stock market kept closing on the 1,000 level all week but could not reach it at the close of trading until Thursday.
Volume was heavy today, although not as heavy as Thursday. About 56.4 million shares were taded today, down from 60.2 million Thursday and from about 70 million on Tuesday and Wednesday. Since Nov. 4 the stock exchange has recorded four of the five busiest days in its history.
In today's trading on the New York exchange, there were 1,099 stocks that closed lower in price and 503 that closed higher.
On the American Stock Exchange, the index closed down 1.84 points to 358,44, and 379 stocks closed lower in price and 255 were higher at the end of trading.