Stocks fall again on earnings worries Dow industrials surrender 15 points

February 28, 1996|By BLOOMBERG BUSINESS NEWS

NEW YORK -- U.S. stocks fell yesterday for a second day, as Micron Technology Inc.'s pessimistic appraisal of the computer-chip industry raised concern that a stagnating economy will hamper corporate profit growth this year.

Micron's stock led a retreat in semiconductor shares after the company said it won't finish a new $2.5 billion factory until business picks up. The announcement, which accompanied disappointing profit reports from two big retailers, chilled investors' enthusiasm for stocks.

The Dow Jones industrial average closed at 5,549.21, down 15.89, after twice triggering the New York Stock Exchange's "uptick" rule by falling more than 50 points below Tuesday's close. It was the fourth time in two days that the curb was imposed to limit computer-driven trades and stabilize the market.

AT&T Corp., Exxon Corp. and Aluminum Co. of America led 22 of the Dow industrial's 30 stocks lower. The average is now down 81.28 points, or 1.4 percent, since it reached its 16th record of the year on Friday.

Among broad market indexes, the Standard & Poor's 500 index fell 3.22 to 647.24 as semiconductor, oil and long-distance issues slipped. The Nasdaq composite index slid 6.88 to 1,106.17, hurt by losses in Cisco Systems Inc., Applied Materials Inc. and Oracle Corp.

The Russell 2,000 index of small capitalization stocks fell 0.45 to 324.85; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq stock exchanges, dropped 27.62 to 6,354.26; the American Stock Exchange market value index slid 1.49 to 563.86; and the S&P 400 midcap index fell 0.52 to 229.22.

On the New York Stock Exchange, 1,340 stocks fell and 1,014 rose. Some 431.3 million shares changed hands on the Big Board, above the three-month daily average of 409 million shares.

Yesterday's most active stocks in U.S. composite trading were Hanson PLC's American depositary receipts, Micron, Applied Materials, Microchip Technology Inc. and Informix Corp.

Micron's stock fell $3.125 to $33.625 and was the second most active stock in U.S. trading. Late yesterday, the company said it will hold off completion of its new Lehi, Utah, plant, after spending $400 million so far. Analysts trimmed earnings estimates for the company's quarter ending in February to accommodate the slackening demand Micron cited.

The Philadelphia semiconductor index of 16 stocks fell 6.58 to 196.91. Applied Materials fell $3.2656 to $38.25; Novellus Systems Inc. dropped $3.50 to $53.25; and Texas Instruments Inc. gave up $2 to $51.375.

Retail shares dropped after two industry bellwethers posted disappointing profits. The S&P general retailers index of four stocks -- Sears, Roebuck & Co., Kmart Corp., Dayton Hudson Corp. and Wal-Mart Stores Inc. -- fell 0.19.

Telephone issues fell. Sprint Corp. fell $1.125 to $42.50; AT&T slumped $1 to $64; US West Corp. fell 37.5 cents to $33.50; and Bell Atlantic dropped 37.5 cents to $65.875.

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