Earnings depress stocks Dow up 0.28


April 16, 1993|By Bloomberg Business News

NEW YORK -- Stocks edged lower yesterday as the release of first-quarter earnings gave investors little reason to be optimistic about the economic recovery.

"The earnings in many industries just aren't as good as many thought they would be," said Grace Messner, vice president at Wilmington Trust Co.

The Dow Jones industrial average rose for a fourth straight day, adding 0.28, to 3,455.92. The average surged in the final hour from a session low of 3,440 after President Clinton said he'll accept a smaller economic stimulus package than the one that he originally proposed.

"Clinton is saying government spending may be lower than expected," said Thomas Heck, head trader at Mabon Securities. "That caused interest rates to fall and stocks to rise late in the day."

Standard & Poor's 500-Stock Index closed 0.26 lower, at 448.40. The Nasdaq Combined Composite Index slumped 3.62, to 670.32, and the American Stock Exchange Market Value Index fell 1.10, to 419.42. Declining common stocks led declining issues by about 8-to-7 on the New York Stock Exchange.

The Dow Jones utilities average advanced 1.57, to a record 247.56, and the Dow Jones transportation average climbed 12.28, to a record 1,673.21. Trading was moderate, with about 260 million shares on the Big Board.

Concern that first-quarter earnings aren't strong enough to justify current share prices hindered the market's rise, analysts said. Companies like Microsoft Corp. saw their stocks decline after some analysts issued negative reports about their earnings outlook.

Investors are rattled, believing that lower-than-expected earnings reports and lingering concern about the sluggish economy are going to trigger a big decline in the stock market, said Barry Berman, head trader at Robert W. Baird & Co. "It's death if a company's earnings fall below expectations," he said.

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