NEW YORK -- Stocks closed mixed yesterday amid doubts over whether President Bush could revive his re-election campaign with a dramatic speech last night at the Republican National Convention.
The Dow Jones industrial average fell 2.17, to 3,304.89. Declining common stocks outnumbered advancing issues by about 4-to-3 on the New York Stock Exchange. But the NASDAQ Combined Composite index gained 0.25, to 567.86, and the Standard & Poor's 500 rose 0.07, to 418.26.
"Bush must say something concrete about how he plans to revive the economy if stocks are to rise any further," said Thomas Callahan, senior vice president of U.S. equities at Yamaichi International (America).
Market analysts were concerned that a Democratic victory in the presidential election would lead to higher taxes and fiscal policies that are burdensome for businesses.
"If Bush doesn't start making headway in the polls soon, stocks are in trouble," Mr. Callahan said.
"Higher tax rates would cause a sell-off in the stock market," said John Silvia, chief economist for Kemper Financial Services.
Bill Clinton, the Democratic candidate, is known to be considering legislative steps to tighten control over the health-care industry. Such steps would trigger a decline in shares of pharmaceutical, diagnostic and hospital management companies, Mr. Silvia said.
Bank stocks rebounded as the group ignored rumors that a possible impeachment of President Fernando Collor de Mello of Brazil would disrupt a debt-reduction agreement with international banks.
Citicorp rose 5/8 , to 17 3/8 , Chase Manhattan gained 1 1/4 , to 23 7/8 , Wells Fargo increased 1 1/4 , to 69 1/8 , Chemical Banking advanced 7/8 , to 33 5/8 , J.P. Morgan rose 3/4 , to 60 1/8 , and Bank of Boston advanced 5/8 , to 22 3/4 .
Automobile stocks fell on reports that General Motors plans to reduce production in the fourth quarter because of concern about the economic recovery. GM declined 3/4 , to 35 5/8 , Ford Motor fell 1/4 , to 41 1/4 , and Chrysler slid 1/8 , to 20 3/4 .
Wang Laboratories, Citicorp, Novell Inc., Bristol-Myers Squibb and Telefonos de Mexico were the five-most-actively traded stocks on the U.S. Composite.
Novell fell 1 7/8 , to 47 1/4 , after a Merrill Lynch analyst cut his rating on the computer software manufacturer to "neutral" from "above average."
Bristol-Myers declined 2 1/8 , to 66 7/8 , after an analyst at Smith Barney, Harris Upham cut her rating on the drug company to "underperform" from "hold," and reduced her earnings estimates.
RJR Nabisco Holdings declined 1/8 , to 8 5/8 , after a rating cut at Robinson-Humphrey. An analyst at Dean Witter Reynolds reduced his rating because of concern about lower-than-expected profits in RJR Nabisco's domestic tobacco business.
Intel gained 1 1/8 , to 57 1/8 , on news that Zeos International Ltd. is introducing a personal computer system based on Intel's new 66-megahertz i486 DX2 microprocessor.
McDonnell Douglas fell 7/8 , to 41, after the aerospace and defense contractor said it will lay off about 10 percent of its management at its military aircraft and missile systems unit.
Fisher-Price declined 1 5/8 , to 22 5/8 , after PaineWebber removed the stock from its "buy" list.
The Arms index, a measure of traders' and investors' views, closed at 1.01. A reading above 1 is considered bearish; below 1 is regarded as bullish. The index compares advancing and declining volume with the number of advancing and declining stocks.