Blues chips slip again, but broader market gains


December 04, 1992|By Bloomberg Business News

NEW YORK -- Blue-chip stocks fell for a third straight session yesterday, while the broader market headed higher, helped by increasing signs that an economic recovery is under way.

The Dow Jones industrial average declined 9.72, to 3276.53, with Allied-Signal Inc. and Caterpillar Inc. accounting for much of the slide. The NASDAQ Combined Composite index rallied 3.44, to an all-time high of 656.35. The advance was led by Intel Corp.

Standard & Poor's 500 index rose 0.02, to 429.91, and the American Stock Exchange Major Market index gained 1.12, to 393.68.

Advancing common stocks roughly equaled the number of declining issues on the New York Stock Exchange. Trading was active, with about 240 million shares changing hands on the Big Board.

"A couple of stocks weighed down the Dow industrials," said Dale Tills, manager of institutional equities trading at Charles Schwab Corp. in San Francisco. "The broader market continues to do well."

The stock market shook off a big slide in shares of oil and retail store companies. Oil stocks, led by Atlantic Richfield Co. and Pennzoil Co., fell amid jitters about a 14 percent drop in crude prices since early October. Retail store stocks declined following the release of only moderate sales gains for November.

"People are starting to worry about profits again," said Hugh Johnson, chief investment strategist at First Albany Corp. "Corporate profits better be good in the fourth quarter, or the market's in trouble.

"The market seems to have stopped so people can catch their breath and wait for the release of the November employment report," Mr. Johnson said.

The Labor Department is scheduled to release its monthly employment report today. Economists estimate that 59,000 new non-farm jobs were created in November, according to a survey by Bloomberg Business News.

"Unless the Labor Department reports an increase of more than 100,000 non-farm jobs, I think the report will be perceived as a disappointment by the stock market," Mr. Johnson said.

The government released some optimistic economic news yesterday, including the 1.7 percent gain in factory orders in October, the biggest gain in four months.

"The stock market seems to be in a stalemate," said Ricky Harrington, market analyst at Marion Bass Securities Corp. "We've had a lot of good economic news, and the stock market has had a good run," Mr. Harrington said. "Now, the market's waiting for something new to get it going again."

A reduction in German interest rates or release of better-than-expected earnings might be the trigger for another rally in the stock market, Mr. Harrington said.

NationsBank Corp., Intel Corp., Advanced Micro Devices Inc., Glaxo Holdings Plc and Comverse Technology Inc. were the five most actively traded issues on the U.S. Composite.

More than 8.6 percent of NationsBank Corp.'s outstanding shares changed hands yesterday as brokerage firms execute complex trades designed to capture the regional bank's dividend. NationsBank's stock was unchanged at $50.50.

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