Blue chips dip sharply

January 24, 1992|By New York Times News Service

NEW YORK -- Blue-chip stocks fell sharply yesterday in heavy trading, almost erasing Wednesday's gains, while the broader market was mixed. Investors grew cautious, analysts said, as many earnings reports failed to justify the market's current lofty levels, and a weak bond market failed to offer support.

The Dow Jones industrial average fell 29.07 points, to 3,226.74, as New York Stock Exchange volume reached 234.6 million shares traded, up from 228.1 million Wednesday. Losing issues slightly outpaced gainers as the Big Board composite index slipped 1.30, to 228.89.

"The negative day in bonds spilled over into equities," said Ricky Harrington, director of equity investment for Marion Bass Securities. "The bond market had one of its largest declines in two weeks, affecting interest rates. And since interest rates have been the driving force behind this market, any news on interest rates brings stocks under pressure."

Some profit taking had to be expected after the huge run by stocks over the past five weeks, he said.

Another blue-chip indicator, the Standard & Poor's index of 500 stocks, was off 3.17, to 414.96, while the American Stock Exchange index gained 1.09, to 414.27. On the NASDAQ, the composite was up 2.18, to 622.86.

"The market has not broken any support levels," Mr. Harrington said. "It appears to be a normal correction, and the rally could continue in a couple of days." But the market has discounted too many things, leaving very little room for disappointment, he added.

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