STATE OF BUSINESS: Signs of Uncertainty

Uncertainty over settlement of the steel strike and tightening money last week alarmed many an investor, and the stock market suffered a sharp selloff. The Dow Jones industrial average dropped 9.90 points to 645.90, lowest since June 29. then rallied at week’s end to close at 652.18.

Although there have been few deeply noticeable effects of the steel strike thus far. signs of its impact on the economy are now beginning to appear. The Commerce Department reported that in July, manufacturers’ shipments and new orders declined. Total adjusted manufacturing sales in July dropped to $30.8 billion, a decline of $400 million from June.

Manufacturers’ inventories also reflected the steel strike. Although rising $100 million to $52.2 billion in July, the inventory increases were well below the $400 to $500 million monthly increases earlier this year. August inventory figures are expected to show a sharp decline because of the strike.