Dow off 21 points as jobless claims rise

WALL STREET

March 12, 1993|By Bloomberg Business News

NEW YORK -- Stocks fell yesterday for the first time this week amid discouraging news about the economy.

"Investors backed away from this market after watching it hit all-time highs for three straight days," said Jon Groveman, president of Ladenburg, Thalmann & Co.

The Dow Jones industrial average dropped 21.34 points, to 3,457.00. The Dow bounced from a session high of 3,479.69 to a session low of 3,450.51 before closing down on the day. It was only the third time in the past 12 sessions that the Dow has declined.

Stocks were hurt by the Labor Department's report that more Americans filed first-time applications for unemployment benefits in the last full week of February. The report pointed to stalled improvement in the job market. The unexpected increase of 25,000 claims, to a seasonally adjusted 376,000, in the week that ended Feb. 27 was the most since claims rose to 382,000 in the first week of November.

"With stocks near record highs, the last thing the market needs is discouraging news about the economy," said Thom Brown, a managing director at Rutherford, Brown & Catherwood.

The Standard & Poor's 500 index fell 2.64 points, to 453.70, after hitting an all-time high Wednesday of 456.34. The New York Stock Exchange Composite Index slid 1.16, to 250.20.

The Nasdaq Combined Composite index of smaller stocks and the American Stock Exchange Market Value index were the only major stock averages to post gains. The Nasdaq composite closed up 1.41, at 694.28, though below its session high of 695.99. The Nasdaq's advance was led by shares of Novell and Microsoft. The American Stock Exchange Market Value index rose 0.43, to 422.31.

Declining common stocks exceeded advancing issues by about 8-to-7 on the New York Stock Exchange. Trading was less active than usual, with about 255 million shares changing hands.

The rise in claims for unemployment benefits sparked declines in shares of economically sensitive issues, such as paper and chemicalstocks, which often fall when bad economic news is released.

Paper stocks were also hurt by negative comments by Sherman Chao, an industry analyst at Merrill Lynch. Mr. Chao cut his ratings on Georgia-Pacific, Louisiana-Pacific and Willamette Industries over concern that the Clinton administration will act to control prices of wood products. The White House has set a summit for April 2 to discuss the paper industry and the environment.

Georgia-Pacific fell $2.375, to $64.625; Louisiana-Pacific slid $4.625, to $70.875; and Willamette slumped $1.50, to $41.50.

Stocks were also spooked by concern about today's release of the February producer price index, which will provide more information about inflation, said Barry Berman, head trader at Robert W. Baird & Co. "If there's any sign that inflation is picking up, interest rates will rise, and stocks will fall," he said.

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