Dow slips, ending 4-day run of records Industrial average's 1.09-point decline leaves it at 4,871.81

November 15, 1995|By BLOOMBERG BUSINESS NEWS

NEW YORK -- U.S. stocks fell yesterday, led by technology issues, as analysts grew concerned that falling prices and burgeoning production of semiconductors will stunt chipmakers' profit growth.

Soundview Financial Group analyst Rick Whittington sparked the slide by downgrading Micron Technology Inc. and Texas Instruments Inc., high-flying chip makers with share prices that have more than doubled this year.

The Dow Jones industrial average, ahead most of the day, closed lower amid a round of computer-guided sell orders. International Business Machines Corp., Walt Disney Co. and J. P. Morgan & Co. led the decline. The average slipped 1.09, to 4,871.81, snapping a four-day run of record highs.

IBM dropped $2, to $95.375; Disney fell $1.375, to $56.75; and J. P. Morgan slipped $1.125, to $74.875.

Shares of aircraft engine maker United Technologies Corp. fell 62.5 cents, to $88, after rival Rolls-Royce Plc of Britain won a contract to supply 61 engines to Boeing Co. Singapore Airlines Ltd. gave Boeing orders and options for 77 of its 777 jetliners, an award potentially worth $12.7 billion. Boeing fell 25 cents, to $71.50, after jumping $1.25 earlier.

A rally in Minnesota Mining & Manufacturing Co. shares fueled the Dow industrials' earlier gains. 3M, accounting for about 3.7 percent of the Dow, jumped $2.625, to $61.625, after it said it will spin off its data storage and imaging systems and discontinue its less profitable audio and videotape units. The company was raised to "buy" from "hold" by an analyst at Prudential Securities.

The Standard & Poor's 500 index slipped 3.01, or 0.5 percent, to 589.29. Technology, financial and retail issues were the biggest decliners, offsetting gains in drug, chemical and health-care shares.

The Nasdaq composite index, which includes Intel Corp., Microsoft Corp. and dozens of other technology companies, plunged 17.84, to 1,040.62. Intel, Microsoft and Cisco Systems Inc. led the index's slide, its largest decline in a week.

Some 1,350 shares rose and 928 shares fell on the New York Stock Exchange.

The Russell 2000 index of small companies fell 2.08, to 301.52; the American Stock Exchange market value index weakened 1.82, to 528.61; and the Wilshire 5000 Index stumbled 36.20, to 5,818.36.

About 354 million shares changed hands, up from 292 million Monday.

Shares in a dozen makers of semiconductors tumbled to their lowest levels since July as investors grew skeptical that market titans can maintain their growth.

Micron Technology Inc. plunged $4.875, to $56.75, its lowest level since July 20, and Texas Instruments fell $1.75, to $60.50, after Mr. Whittington downgraded his ratings on both to "hold" from "buy." Micron has fallen 40 percent in the past two months, and Texas Instruments 28 percent since Sept. 29.

Among other chip makers that lost, Intel sank $2, to $65.125; Applied Materials Inc. plunged $3.875, to $46; National Semiconductor Corp.'s stock fell $1.25, to a six-month low of $21.25; LSI Logic Corp. shares dropped to their lowest level since July 5, falling $3, to $40; and Xilinx Inc.'s stock tumbled to $36.50, down $3.4375.

Their declines sent the Philadelphia semiconductor index down 10.23, or 4.2 percent, to 231.59, its lowest level since June 14. Still, the index has gained 65 percent year to date.

Weakness in the semiconductor group spread to other technology stocks. Hewlett-Packard Co.'s shares dropped $4.25, to $89.125, its lowest level in almost a month. The maker of printers, workstations and tape drives will report third-quarter results Friday.

Even shares of Internet software company Netscape Communications Corp. reversed their gains. After being up to 100.625, the shares fell 25 cents, to $96.50. The Mountain View, Calif.-based company announced a 2-for-1 stock split. The stock, which has traded for little more three months, is still up more than threefold from its offering price.

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