Stocks mostly lower, but Dow gains 6

WALL STREET

July 20, 1993|By Bloomberg Business News

NEW YORK -- U.S. stocks closed mostly lower yesterday amid concern over the strength of corporate profits among technology issues, analysts said.

The Dow Jones industrial average gained 6.99, to 3,535.28, near a session high of 3,540.59. Caterpillar Inc. and oil stocks paced the advance. The Standard & Poor's 500 Index was up 0.27, at 446.02.

Meanwhile, weakness among technology stocks weighed on the Nasdaq Combined Composite Index, which lost 3.90, to 695.83. The American Stock Exchange Market Value Index declined 2.99, to 433.49.

"The over-the-counter market was weak all day," reflecting Apple Computer Inc's 8-point drop on Friday, said Ronald Doran, institutional trading director at C.L. King & Associates. "Carryover from technology stocks" hurt other issues, he said.

Declining common stocks led advancing issues about 5-to-4 yesterday on the New York Stock Exchange. Computer, entertainment and specialty retailers were among the worst-performing issues among S&P stocks. Trading was moderate, as about 216 million shares changed hands on the NYSE.

Blue chip stocks moved higher as the U.S. Treasury market rebounded from early losses.

Yields on the benchmark 30-year bond rose to 6.56 percent at one stage as crude oil prices rallied, igniting a 3.4-point increase in the Commodity Research Bureau futures index.

The barometer of commodity prices hit a 21-month high before it retreated to close 2.83 higher, at 218.01. Late in the day, the 30-year Treasury was unchanged, at 107 20/32, to yield 6.54 percent, unchanged from Friday.

Stocks rally when bond yields are low because investors tend to move funds from fixed-income instruments to the stock market, where higher returns can be obtained.

"I expect us to go to new highs as long as earnings reports come out and are close to estimates," said C.L. King's Mr. Doran. Investors might also be reassured in the next few weeks as proposals emerge from this week's House-Senate budget conference on President Clinton's proposed deficit-reduction package, he said.

Shares of Apple were lower again, falling $1.875, to $25.625. On Friday, Apple reported a loss of $188.3 million, or $1.63 a share, for the third quarter ended June 25, reflecting a large after-tax charge of $198.9 million to cut 2,500 jobs and to pay for other restructuring steps.

Other technology stocks also declined as investors anticipated weaker personal computer earnings spilling over to semiconductor, software and telecommunications companies.

Cisco Systems Inc. was down 50 cents, at $49.50, and Adobe Systems Inc. dropped $2.125, to $52.

Among larger technology issues, International Business Machines Corp. fell $2, to $43.625; Digital Equipment Corp. dropped $1.625, to $37.625; Microsoft Corp. dropped $2.375, to $78.75; and Hewlett-Packard Co. dropped $1.50, to $73.75.

Apple Computer, Intel Corp., Picturetel Corp., IBM and Gerant Companies were the five most actively traded stocks on the U.S. Composite.

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