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Market’s Wildness Raises Question About Ticker Tape’s Value

January 31, 1987

NEW YORK (AP) _ The stock market’s increasingly heavy trading volumes and computer-driven gyrations have unnerved many brokers and revived an old debate about the value of a familiar Wall Street symbol, the ticker tape.

In an era when access to instantaneous information is crucial to securing profits and averting big losses in a volatile market, some traders argue that the tool for reporting stock trades invented by Thomas Edison more than 120 years ago is an obsolete fixture, a relic of more genteel times.

No matter whether it is an old-fashioned paper tape or the modernized version that moves across a display screen at 900 characters a minute, the ticker tape often falls several minutes behind the pace of trading and makes it largely useless, these traders contend.

″With modern electronics the individual is deluged with information and it isn’t efficient to handle a tape. You can press buttons and get information on this group or that group,″ said Theodore Halligan, an analyst for the Minneapolis-based investment firm Piper Jaffray & Hopwood Inc.

″I know one or two people who sit there and mechanically chart the ups and downs of a stock with a tape, but I think it’s like going back to the stone age,″ he said.

Others argue that the tape is still highly valuable because its linear structure is easier to comprehend and provides a type of running commentary on the patterns of stock prices during the day.

″There’s nothing more instantaneous than the ticker tape,″ said Alfred Goldman, director of technical market analysis at the St. Louis investment firm A.G. Edwards & Sons, Inc. ″In my opinion, the only altar at which I worship is the tape, because it’s the only thing that doesn’t lie.″

Debates about ticker tape have been sporadic for years, but have taken on new significance because of the market’s spectacular volatility and trading volumes, marked by the 302.39 million-share day on the New York Stock Exchange on Jan. 23, when the Dow Jones industrials plunged 110 points inside an hour.

″We’re still shaking from that day,″ said Jack Garry, manager of equity trading at the Philadelphia investment firm Butcher & Singer Inc. None of his traders use tape, he said, because ″with the volume and gyrations, you look away for a few minutes and you could be lost.″

The pace of trading was relatively normal this past week but still received an occasional jolt from program trading, the computerized arbitrage in which brokers buy and sell huge amounts of stock to profit from differences between the price of a stock and its corresponding stock future.

On the week, the Dow Jones average of 30 industrials rose 56.52 points to 2,158.04.

The New York Stock Exchange composite index rose 2.09 to 156.11. On the American Stock Exchange, the market value index was up 5.02 to 300.47.

Volume on the NYSE averaged 179.11 million shares, compared with 212.57 million the previous week.

Defenders of the ticker tape say veteran tape readers can spot trends that analysts who utilize computers may miss completely.

″I’ve been watching it for 26 years and you learn how to crank into your mind a late tape,″ said Goldman. ″You have to be aware of everything you can be aware of.″

Others say the tape has a sort of nostalgic value, and many keep one eye on an electronic tape when business is slow on the trading floor.

″It’s our way of still staying in touch with our roots,″ said Lawrence R. Helfand, manager of retail sales at Rodman & Renshaw Inc. in Chicago. ″I don’t think it’s useful in the big stocks anymore, because they can swing and turn around on a dime, but in secondary stocks, it allows somebody that’s experienced to possibly move a little quicker.″

Some technical market analysts have not seen an old-fashioned ticker tape in years and criticize tape readers as refusing to change with the times.

″There are fewer and fewer people who read tapes, but they’re still used,″ said Robert B. Ritter, senior vice president and technical analyst at L.F. Rothschild, Unterberg, Towbin in New York. ″Every time I bring it up with tape readers, they say go do your thing and we’ll do ours.″

End Adv Weekend Editions Jan. 31-Feb. 1

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