NEW YORK, DEC. 13 -- The Dow Jones industrial average closed down almost 8 points today after renewed fears about the Middle East sent oil prices higher and bond prices lower.
The January contract for crude oil in New York rose $1.07 to $26.42 a barrel after a federal judge ruled that President Bush need not get congressional approval for ordering an attack on Iraqi troops in the Persian Gulf. U.S. Treasury bonds fell in response, with the 30-year Treasury bond trading late in the afternoon down 22/32, at 106 26/32.
Hopes for a further credit easing also were dampened by an 1/8-point rise in the federal funds rate, the rate the Federal Reserve charges to its member banks. Fed funds traded late in the day at 7 3/16 percent.
At the close, the Dow was down 7.92 at 2614.36, with advancing issues narrowly outpacing declining ones. Volume was a lackluster 162 million shares.
Big movers included Vista Chemical Co., which shot up 28 3/4 to 53 3/4, after a German company, RWE-DEA, made a friendly tender offer of $55 per share, or $590 million. James Wilbur, managing director for equity research at Smith Barney, Harris Upham and Co., said a merger makes strategic sense. The two companies have "exactly the same kind of product lines, the same kind of customers, in a market that's looking for more globalization," he said.
AT&T led the Dow's most-active chart, rising 5/8 to 31, on persistent rumors that NCR Corp., its target for a hostile tender offer, had found another suitor. NCR rose 5/8 to 90 1/8. Both companies said there were no new developments and declined to comment on their stock activity.
Toys R Us fell 1 1/8 to 23 1/2 in active trading, dipping as low as 23 1/8, after an analyst at Salomon Brothers Inc. lowered his fourth-quarter earnings estimate to $1.12 per share from $1.25 and for the year to $1.35 from $1.50.
Bank stocks fell on nervousness that a House Banking Committee report on the health of the Federal Deposit Insurance Corp., due out next week, will show serious weakness in the bank insurance system. Manufacturers Hanover Corp. fell 7/8 to 21 3/8 and J.P. Morgan and Co. 1 1/8 to 43 3/4.
Genentech plunged 3 1/4 to 24 after the company reported that it expects only modest growth in its popular product, Activase. Executives also said they didn't expect approval of any major new products in 1991 or 1992.
The Dow utilities closed down 1.01 at 209.32, while the transports rose 1.88 to 917.17
Broad stock indexes were mixed, with the Standard & Poor's down 0.85 at 329.34, the Value Line up 0.57 at 241.39, the NYSE composite down 0.19 at 180.06, and the Amex Market Value down 1.00 at 306.71 and the Nasdaq Composite up 1.08 at 371.50.