Dow dips 2.16 points on earnings worry

WALL STREET

September 24, 1992|By Bloomberg Business News

NEW YORK -- U.S. stocks closed slightly lower yesterday a the market was unable to shrug off concerns about third-quarter earnings and doubts that Germany's Bundesbank will cut interest rates.

The Dow Jones industrial average slid 2.16 points to 3278.69 after falling 39 points Tuesday. The index's decline was led for a second straight day by a slump in General Motors and Coca-Cola.

Declining common stocks outnumbered advancing issues by 802 to 665 on the New York Stock Exchange. Trading was active, with about 207 million shares changing hands on the Big Board. Standard & Poor's 500 index eked out a gain of 0.30 to 417.44, while the NASDAQ composite slid 0.04 to 582.96.

"Stocks are trying to stabilize, but there are a lot of lingering concerns that are preventing the market from rising," said John Blair, head of trading at County NatWest Securities.

The biggest concern is that third-quarter profits will be below investors' expectations, Mr. Blair said. Already, such blue-chip companies as General Motors, Coca-Cola and General Mills have released disappointing earnings news and there's sure to be more, Mr. Blair said.

Beverage, automobile, paper, railroad and chemical stocks are being hurt most by the earnings concerns, Mr. Blair said. These are the groups that fell the most yesterday, according to Bloomberg calculations.

Meanwhile, the Bundesbank still hasn't lowered interest rates despite turmoil in the foreign exchange markets.

"There's a great deal of confusion out there about what's going to happen in Europe, and it's definitely weighing on the U.S. stock market," said Thomas Callahan, senior vice president of U.S. equities at Yamaichi International (America).

General Motors shares declined 1 to 32 in heavy trading amid concerns about a weak 10-day sales report yesterday and plans to cut its third-quarter production schedule by 5 percent to 1.531 million.

Gensia Pharmaceuticals, the most actively traded U.S. stock, extended Tuesday's 13 5/8 -point plunge. The stock fell 3 1/8 , to 18 7/8 , on disappointing results from an international study of its main drug, Arasine.

Coca-Cola declined 1 1/2 to 40 3/4 as the stock continues to weaken on a projection for little growth in international sales.

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