Dow off 2.77 as worriers offset gains

WALL STREET

July 01, 1993|By Bloomberg Business News

NEW YORK -- U.S. stocks were mixed yesterday as concern about the economic recovery offset strength in the Nasdaq market and a rally in airline issues.

"We saw real strength among Nasdaq issues and some transportation stocks, but it wasn't enough to offset lingering worries about the economy," said Lou Todd, a partner at J. C. Bradford & Co.

The Dow Jones industrial average fell 2.77 points, to 3,516.08, as shares of Aluminum Co. of America and Westinghouse Electric Corp. rose while shares of Merck & Co. and Boeing Co. declined. The Dow industrials were up 2.4 percent in the second quarter, which ended yesterday.

The Nasdaq Combined Composite Index rose 2.88, to 703.95, led by Oracle Corp. Oracle's stock surged $3, to $49.25, after the software company reported higher-than-expected fiscal fourth-quarter earnings of 47 cents a share, compared with 20 cents in the prior year.

"The Nasdaq rose because of Oracle," said Richard Ciardullo, director of trading at Eagle Asset Management.

The Dow Jones transportation average soared 19.33, to 1549.92, with shares of UAL Corp. and Southwest Airlines Co. accounting for much of the advance.

Airline stocks received a boost from UAL's decision to stop flying to six U.S. cities, the latest step in a cost-cutting plan announced earlier this year, traders said. UAL rose $1.25, to $123.25; Southwest Airlines gained $1.25, to $43.75; and AMR Corp. rose $1.50, to $63.25.

The Standard & Poor's 500-Stock Index declined 0.16, to 450.53, and the American Stock Exchange's Market Value Index rose 0.72, to 434.24. Advancing common stocks led declining issues by about 9-to-7 on the New York Stock Exchange.

Stocks were constrained by concern about the economy. "It looks like the recession may not be over, and that means earnings may not be as strong as forecast," said John Brooks, director of sales and marketing at the Notley Group.

Yesterday morning, the Commerce Department said factory orders declined 1.4 percent during May, the third consecutive monthly loss, as demand weakened in the aircraft and defense industries.

The Labor Department is to release the employment report for June tomorrow. Economists are estimating the U.S. economy added 141,000 nonfarm jobs in June.

"People are antsy ahead of Friday's employment report," said Thomas Heck, senior vice president in equity trading at Mabon Securities. "We want some signs the economy is getting better."

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