Stocks fall for 2nd day due to turmoil in Russia


March 24, 1993|By Bloomberg Business News

NEW YORK -- U.S. stocks fell yesterday for a second straigh day as investors' concern about political turmoil in Russia

continues to build.

"I think investors will remain nervous for the next several weeks, or even months, until we see how the situation in Russia resolves itself," said Thom Brown, a managing director at Rutherford, Brown & Catherwood Inc.

The Dow Jones industrial average declined 1.62, to 3461.86. A drop in oil stocks led the index lower.

The Nasdaq Combined Composite Index, which was up more than 1 percent early in the day, closed down 1.58, at 675.04. Standard & Poor's 500 Index fell 0.12, to 448.76, and the American Stock Exchange Market Value Index gained 0.38, to 419.56.

Declining common stocks led advancers about 8-to-7 on the New York Stock Exchange. Trading was below average, with about 233.6 million shares changing hands on the Big Board.

Concern about the political future of Russian President Boris Yeltsin continues to weigh on U.S. stocks, said Alfred Goldman, market analyst at A.G. Edwards & Sons.

Russia's Constitutional Court found no grounds to impeach Mr. Yeltsin though his move to rule by decree violated some constitutional provisions.

Ruslan Khasbulatov, the speaker of the Supreme Soviet and a conservative, said he would seek an emergency meeting of the Congress of People's Deputies to move to impeach Mr. Yeltsin.

The Clinton administration has said democracy in Russia is important to America's national security and economy, and Mr. Yeltsin represents the best chance to push through political reform there. The prospect of rising tensions in Russia raises questions about how far President Clinton will be able to go to cut defense spending to reduce the federal budget deficit.

Nervousness about Russia was offset somewhat yesterday by optimism about a decline in interest rates, analysts said. "The bond market's rise ignited some computer-driven buying in the stock market this afternoon," said Philip Smyth, market analyst at Birinyi Associates Inc.

The benchmark 30-year Treasury bond was about 3/8 -point higher, to yield 6.77 percent, down three basis points on the day. The lower rates were spurred by buying of government debt by municipalities and the report by Johnson Redbook Service that retail sales during the first three weeks of March are down 1.8 percent from February's pace.

Municipalities are buying Treasuries to place in escrow accounts for later redemptions of higher-interest debt. In this way, they effectively refinance old debt at low rates.

Shares of drug, health care, telephone, chemical and semiconductor companies were the best performers among industry groups, while international oil, household product and retailing stocks were down the most.

Retail stocks slumped following the release of Redbook's retail sales report. Dayton-Hudson Corp. lost $1.50, to $77.375; Sears, Roebuck & Co. declined 62.5 cents, to $52.375, and Wal-Mart Stores inc. fell 25 cents, to $32.75.

Oil stocks fell after Wertheim Schroder & Co. lowered its investment rating of the group.

Mobil Corp. slid 50 cents, to $69.125; Amoco Corp. declined $1, to $56.875; Exxon Corp. fell 25 cents, to $64.625, and Texaco Inc. fell $1, to $62.50.

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