Weak retail sales subdue a rally

April 07, 1995|By Bloomberg Business News

NEW YORK -- U.S. stocks were mixed yesterday as retail shares plunged on lagging March sales, overwhelming a rally in chemical stocks led by DuPont Co.

Retailers accounted for six of the stocks posting the biggest declines on the New York Stock Exchange. The losses began after a report showed U.S. department stores and clothing chains chalked up poor sales last month, when shoppers held off on their usual pre-Easter buying sprees. Waban Inc., AnnTaylor Stores Inc. and Caldor Corp. were among the biggest losers.

"The market is apprehensive about earnings," said Steven Kernkraut an analyst at Bear Stearns & Co. "Investors want to see proof that consumers are willing to spend."

Also, he said, the retail shares were poised to fall. Until yesterday, the Standard & Poor's retail store index of four stocks -- including Wal-Mart Stores Inc. and Sears Roebuck & Co. shares -- had risen 6.8 percent, to a 52-week high, since the middle of March.

Even so, the Dow Jones industrial average and Standard & Poor's 500 index both eked out their 16th record highs this year.

The Dow industrials rose 4.84, to 4,205.41, to its second record high this week. DuPont, AlliedSignal Inc. and Procter & Gamble Co. led the gains. Advancing shares outnumbered decliners 1,144-to-1,006.

Chemical shares gained as DuPont continued a rally it began Wednesday on the strength of reports Canadian beverage company Seagram Co. was preparing to sell its 24.2 percent stake in DuPont.

After the market closed, DuPont announced that it had agreed to pay $8.8 billion for most of Seagram's stake in the chemical conglomerate.

DuPont shares jumped $1.50, to their second consecutive 12-month high of $64.75. Monsanto Co. was up $3.375, to $82.50, and Dow Chemical Co. gained 62.5 cents, to $72.625.

Among broader market measures, the Standard & Poor's 500 stock index added 0.51, to 506.08, its second consecutive record high. Money center banks, chemical companies and regional banks gained the most.

The Nasdaq combined composite index, laden with technology issues, dropped 2.52, to 813.80. Oracle Systems Corp., Intel Corp. and Microsoft Corp all fell.

Big Board trading volume rose to 320.5 million shares from 317.6 million. That's still below the average

332.2 million shares traded daily since the beginning of the year.

Technology shares slipped on renewed concern about company earnings. The slide began when Wall Data Inc. said it expects to report a loss between 2 cents a share and break-even in the first-quarter, compared with Wall Street's forecast of 24 cents a share. Wall Data shares lost almost half their value, falling $19.75, to $22.

The announcement rekindled concern touched off by Sybase Inc.'s announcement Tuesday that technology companies' earnings may lose some steam this quarter. "There's certainly some nervousness on the eve of the earnings-reporting period," said Eric Miller, chief investment officer at Donaldson Lufkin & Jenrette. "So far, there's been a couple of disappointments."

Microsoft shares were down 62.5 cents, at $70; Oracle's stock fell $1.875, to $29.375; and Intel's stock closed down $1.125, at $85.50.

The slide in technology stocks tempered gains in Apple Computer Inc. shares. The Cupertino, California-based personal computer maker soared $2, to $36.75, after reports circulated that Canon Inc. is negotiating to buy Apple for $54.50 a share.

Retailers' shares slipped as companies reported lagging sales. AnnTaylor shares fell 10.5 percent, to $32.875, after it reported sales in stores open more than one year fell 0.9 percent from last year.

Dayton-Hudson Corp. also plummeted $2.25, to $68.75, its lowest level since March 20, after an announcement that earnings will be "well below" last year's 47 cents a share.

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