Dow slips 1.04 as broader market has mixed day

April 06, 1995|By Bloomberg Business News

NEW YORK -- U.S. stocks were mixed yesterday as gains in telecommunication shares and a rebound in technology issues balanced weakness in the dollar.

Shares of telecommunications companies rose after Craig McCaw and his family said they will invest as much as $1.1 billion in Nextel Communications Inc. Technology stocks regained ground they lost Tuesday amid renewed confidence that sector earnings will continue to grow.

"In the short term, everyone knows the techs' earnings look good," said Jim Benning, a trader at BT Brokerage. Still, "people tend to look out six months, and they're beginning to wonder how long the techs will sustain their growth -- especially if the economy starts to slow down."

The Dow Jones industrial average closed down 1.04, at 4,200.57, after breaking 4,200 for the first time Tuesday and setting its 15th record high this year. AlliedSignal Inc., Walt Disney Co. and Procter & Gamble Co. led yesterday's decline. Advancing issues outpaced declining shares, 1,193-to-984.

The Dow's advance Tuesday gave the average a 9.6 percent gain so far this year. "People would have been pleased with this performance at the end of the year, much less in the first three months." said Peter DaPuzzo, senior trader at Cantor, Fitzgerald & Co. Instead, investors are concerned their stocks are poised to fall after rising too far, too fast, he said.

One reason is the continuing weakness in the dollar. The currency slumped close to its World War II lows against the Japanese yen again yesterday, even though the Bank of Japan, the Federal Reserve and other central banks stepped in to buy dollars. A weak dollar makes U.S. equities less attractive to foreign investors.

Among broader market measures, the Standard & Poor's 500 stock index, which closed at an all-time high of 505.26 Tuesday, eked out a gain of 0.32, to 505.56, yesterday. Electric utility and chemical stocks advanced.

Chemical stocks gained along with DuPont, shares of which climbed $1.50, to $63.125. Seagram Co. plans to announce by tomorrow an agreement to sell its 25 percent stake in DuPont back to the company. Seagram gained 12.5 cents, to $28.625.

The Nasdaq combined composite index rose 2.60, to 816.32, as Nextel shares jumped $3.375, to $16.625. Other telecommunications stocks gained on the strength of Nextel's advance, aided by a late rally in technology stocks.

Trading volume on the Big Board fell to 317.6 million from 330.5 million Tuesday. That's down from the average 332.2 million shares traded daily since the beginning of this year.

Sybase Inc., which set off Tuesday's slide in technology stocks, led yesterday's advance in that sector. The computer software BTC company's shares, which plunged 41 percent Tuesday after it forecast lower-than-expected first-quarter earnings, gained $1.375, to $24.375, yesterday.

Other technology stocks also recouped their losses. Intel Corp. gained 6.25 cents, to $86.625, after earlier being down as much as $1.8125; and Microsoft Corp. rose 75 cents, to $70.625.

Adobe Systems Inc. jumped $2.50, to $50.75. Apple Computer Inc. was up 87.5 cents, to $34.75.

"They've been knocking them down so much, at some point investors are going to find them reasonably priced again," Mr. Benning said.

Stocks got little help from a report that a key gauge of future U.S. economic activity posted the largest decline in almost two years in February, suggesting that higher interest rates already have slowed consumer spending. The index of leading indicators fell 0.2 percent, in line with economists' expectations.

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