NASDAQ index begins 1993 with a loss Dow up 8


January 05, 1993|By Bloomberg Business News

NEW YORK -- U.S. stocks started the new year on shaky footing as the NASDAQ Combined Composite index lost 0.75 percent of its value yesterday.

"If the weakness among NASDAQ stocks continues, it could be a big problem for the stock market," said Dennis Jarrett, chief market analyst at Kidder, Peabody & Co.

The NASDAQ composite, which closed out 1992 at a record high, declined 5.15 yesterday, to 671.80. The slide was led by shares of MCI Communications Corp., Apple Computer Corp., Dell Computer Corp. and Tele-Communications Inc.

"The NASDAQ has had record-breaking days for several sessions in a row," said E. E. Geduld, president of Herzog, Heine, Geduld Inc. "That kind of streak can't last forever."

Blue chip stocks recorded modest gains as the Dow Jones industrial average rose 8.11, to 3309.22. The advance was led by shares of Aluminum Co. of America and Du Pont.

Declining common stocks outnumbered advancing issues by about 9-to-7 on the New York Stock Exchange. Trading was active, with about 200 million shares changing hands on the Big Board.

Standard & Poor's 500 index fell 0.33, to 435.38, and the NYSE Composite index slipped 0.33, to 239.88. The American Stock Exchange Market Value index declined 1.88, to 397.35.

The stock market has weathered some pessimistic economic news in recent days, said Hugh Johnson, investment strategist at First Albany Corp. Last week, the Federal Reserve said M2 money supply is rising at a rate of only 1.8 percent, indicating weaker economic growth. The National Association of Purchasing Management said manufacturing activity expanded in December at a slower rate than expected.

"These two reports are a reminder that the economy is still having a tough time," Mr. Johnson said. "Many investors will wait for Friday's employment report before they make too big a bet on the stock market."

Declining Treasury bond yields stemmed losses in the stock market yesterday. The slide was prompted by expectations that inflation will remain in check. The yield on the 30-year bond is down to 7.32 percent, the lowest since Oct. 1. "The low interest rates make stocks more attractive relative to other securities," Mr. Johnson said.

Tucson Electric Power Co., Owens-Illinois Inc., International Business Machines Corp., Merck & Co. and Citicorp were the five most actively traded issues on the U.S. Composite.

Tucson Electric Power Co., among the most actively traded issues for the past three weeks, slid 12.5 cents, to $2.375. IBM, after hovering at higher levels for most of the day, closed 25 cents lower, at $50.125.

Citicorp, which hit a 52-week high Thursday, slumped $1, to $21.25. Merck, frequently on the most active list, gained 50 cents, to $43.875.

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