Dow tumbles 21 amid late sell orders

WALL STREET

January 01, 1994|By Bloomberg Business News

NEW YORK -- U.S. stocks were mixed on the final day of 1993, as computer-driven sell orders rocked the market in the final half-hour of trading.

"The computer-linked selling hit about 350 large stocks," said Jeff Rubin, market analyst at Birinyi Associates Inc. "It was a big sell program."

The computer-driven selling knocked more than 25 points off the Dow Jones industrial average. The average closed 21.79 lower, at 3,754.09. Still, the Dow industrials finished 1993 near record highs. The average was up 13.7 percent for the year and set an all-time closing high of 3,794.33 Wednesday.

The Standard & Poor's 500 Index also slumped late in the day. The index closed 2.19 lower, at 466.45. On the plus side, the Nasdaq Combined Index rallied for a seventh straight session. The index was up 5.72, at 776.80, and ended up 14.8 percent for the year.

On the New York Stock Exchange, five common stocks rose for every four issues that fell. Shares of retail companies, one of the year's worst-performing stock groups, were among the market leaders yesterday.

"People looked for bargains and that led them to groups like retail stocks," said Cummins Catherwood, who helps oversee about $260 million for Walnut Asset Management in Philadelphia. "We've been buying shares of Consolidated Natural Gas" for just this reason, he said.

S&P's department stores index soared 18, to 1,412.37, with Dillard Department Stores Inc. accounting for almost all the advance.

Trading was light as many people were off for the New Year's holiday. About 171 million shares changed hands on the New York Stock Exchange, compared with the three-month average of 274.3 million shares.

Some analysts and money managers believe stocks will be weaker in 1994 than 1993. They are concerned that interest rates will rise, pushing investor funds into fixed-income securities.

People are also concerned that earnings won't meet investor expectations. "Earnings for the fourth quarter better be up to snuff or this stock market is in trouble," said Todd Clark, a senior trader at Mabon Securities Inc.

Analysts at Institutional Brokers Estimate System Inc., a unit of Citicorp that tracks earnings, report that earnings from continuing operations will be up 19 percent in the fourth quarter. Analysts estimate profits for all of next year to be up 18 percent on an operating basis.

Analysts are looking to the automobile, computer equipment and precious metal industries to record the strongest year-to-year earnings growth. General Motors Corp., Ford Motor Co. and Chrysler Corp. are expected to report earnings of almost $1.73 billion for the fourth quarter, according to Institutional Brokers. That's up from last year when the three companies earned $165 million on an operating basis.

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