Stocks will continue to meander aimlessly until Friday, when the unpredictable "triple witching hour" casts its spell, analysts predicted.
The market already began churning last week, as major institutional players began unwinding positions and battening down the hatches for what could come this week. The triple expiration Friday phenomenon, when stock options, index options and futures on index options expire simultaneously, has often meant volatile trading conditions.The New York Stock Exchange and the New York Futures Exchange announced that they will move the expiration of their respective index options and index futures contracts to the opening of trading of the underlying stock on expiration Friday.
The changes were submitted to the Securities and Exchange Commission and the Commodity Futures Trading Commission for approval.
In a statement, an exchange spokesman said the NYSE has long advocated settlement in the morning rather than at the close of trading as a practical way to deal with order imbalances and price volatility which historically occur on triple witching days.
According to the exchange, "morning settlement would expose order imbalances to the full sunlight of public disclosure, ensure the broadest market information and facilitate the participation of all interested investors."
In Friday's listless trading environment, the market showed little reaction to news of a 0.1 percent rise in producer prices and a gain of 0.5 percent in industrial production for February, and a rise of 0.9 percent in business inventories in January.
Many of the big institutional investors moved to the sidelines, although they are expected to commit substantial funds to the market before the end of the quarter.
The Dow Jones average of 30 industrials fell 8.68 points Friday to 2258.66. The transportation average fell 8.36 points to 935.32, and the utilities index slipped 0.75 point to 216.55.
Volume on the New York Stock Exchange totaled about 151.76 million shares, down from 174.47 million shares Thursday.
Tax reform is dramatically reshaping the investments of big individual investors, according to a study by the Chicago-based Center for the Study of Investor Behavior.
Income-oriented investments, the few remaining tax shelters, some exotic
investments and certain real estate investments are becoming more popular, the study said.
Big individual investors, managing nearly a half million dollars each in personal investments, expect small company stocks to be the best performing
investments this year, but that's not where they're putting their money. "Big investors are focusing on blue chip stocks because they expect the returns, including dividends, to be comparable on an after-tax basis," said Richard B. Ross, executive director of the center.
The amount of money going to single premium life insurance is expected to triple, according to the study. Also continuing to attract investments are Keogh plans, IRAs and salary deferral plans.
"Investors with more tax losses than they can use under the new law are particularly interested in finding real estate investments," Mr. Ross said.