Big Board: election day's no holiday this year
Yank that voting lever, draw the curtain aside, and remember as the exit pollster approaches: Wall Street will be listening. For the first time ever, the New York Stock Exchange will be open for business on election day.
What makes this year special? Well, the NYSE has attained more international status and must look beyond the petty parochial trading concerns of one country. Perhaps so. But there's a nasty rumor going around that even the Big Board is feeling the off-board competition.
Election results, even when the market was closed on voting day, have tended to produce plenty of action. If President Reagan wins tomorrow, there's the potential for a rally, since Wall Street traditionally welcomes a Republican win.
''You'll see a normal half-day celebration if early results show President Reagan winning,'' says Alfred Goldman, market analyst at A. G. Edwards & Sons in St. Louis. But Mr. Goldman expects only an upward blip, because a GOP victory has long been discounted.
Mark K. Tavel, president of Value Line Asset Management, says, ''If Reagan wins by a smaller amount than the polls suggest and Republicans don't gain ground in Congress, the market could be disappointed.''
Adds Goldman: ''If there is any indication of a surprise (a strong Walter Mondale vote), the market will drop sharply and fall to the low eleven-hundreds if Mondale is elected.'' He notes, however, that stocks traditionally perform early in a Democratic presidency.
As campaigning drew to a close, it was stop-and-go on Wall Street. Investors saw red, green, and yellow signals:
* The index of leading economic indicators rose a modest 0.4 percent in September. But that news was diluted by a downward revision in August figures, the third straight negative month - a trend that has signaled previous recessions.
* Housing sales shot up 21.9 percent in September, the best monthly increase in four years. But most the rise took place in the South alone.
* For the second month in a row, factories received fewer orders for new manufactured goods. September orders were off 1.8 percent.
* Mortgage interest rates slipped to the lowest level since May. Conventional fixed-rate mortgages dropped from 14.25 percent in September to 14.05 in late October. This is encouraging the housing industry.
The bond market, where prices have risen as interest rates slid, continued to rally last week. The latest impetus came as the M-1 (a measure of the supply of ready cash) dipped down near the bottom of the Federal Reserve's target range. And the Reagan administration berated the Fed for not easing credit restrictions , so as to put a little more pep into the economy.
The Dow Jones industrial average, bouncing up and down on these economic reports, closed at 1,216.65, up 11.70 points in five sessions. ''There's a thin level of conviction in either direction. The market's up 15 points one day, down 9 the next, up 9 the next,'' says Mr. Goldman at A. G. Edwards. As a whole, stock players are still too bullish and institutions are too short of cash for a rally to erupt, he says.
Fred C. Allvine sees things differently. The Georgia Institute of Technology professor did a study showing that in each of the last five presidential election years the Dow has risen. The Dow's off-years are go in sync with congressional elections. Until recently, it looked as if 1984 would be the exception. But ''interest rates are coming down - and very rapidly over the last few weeks. If that trend continues, the market has a good possibility of being up this year,'' Mr. Allvine says. Interest rates
Percent Prime rate 12.00 Discount rate 9.00 Federal funds 10.00 3-Mo. Treasury bills 9.28 6-Mo. Treasury bills 9.74 7-Yr. Treasury notes 11.56 30-Yr. Treasury bonds 11.48 Source: Bank of Boston, other banks