Economic signs send industrials down 33 Broader indexes mixed as job creation news cuts both ways

April 10, 1996|By BLOOMBERG BUSINESS NEWS

NEW YORK -- U.S. stocks were mixed yesterday after Monday's broad declines as signs of robust economic growth bolstered retail, paper and oil shares, and lessened investors' appetites for drug, tobacco and beverage companies.

Recent reports that businesses are adding more jobs than forecast this year turned investors on to economic bellwethers such as International Paper Co. that should do best in the months ahead. The good news was tempered by concern that the resurgence in growth could be short-lived as interest rates head higher.

The Dow Jones industrial average fell 33.96 to 5,560.41, its lowest since March 8. Just three sessions ago, the 30-stock average reached a record 5,689.74. Computer-guided "sell" orders contributed to yesterday's decline, according to Birinyi Associates Inc. American Express Co. and Procter & Gamble Co. fell the most.

Among broad market indexes, the Standard & Poor's 500 index fell 2.05 to 642.19 after climbing 2.09 points earlier, and the Nasdaq composite index rose 3.49 to 1,109.15.

The Russell 2,000 index of small capitalization stocks rose 1.72 to 332.43; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq stock exchanges, fell 5.29 to 6,347.67; the American Stock Exchange market value index rose 2.23 to 572.71; and the S&P 400 Midcap index gained 1.83 to 229.52.

Yesterday's most active stocks in U.S. composite trading were Oracle Corp., Intel Corp., Informix Corp., Marine Drilling Co. and Iomega Corp.

Some 1,412 shares rose and 983 fell on the New York Stock Exchange, where about 427 million shares changed hands, just below the three-month daily average volume of 426 million shares.

The Morgan Stanley cyclical index of 30 stocks rose 1.34 to 380.97. Paper company Champion International Corp. rose $1.125 to $45.875; Deere & Co. gained $1.125 to $44; Georgia-Pacific Corp. rose $1.25 to $70; and Aluminum Co. of America spurted $1.125 to $64.375.

International Paper Co. rose 75 cents to $39.25 even after the company reported disappointing first-quarter earnings. Investors said paper prices will soon rebound and help profits recover by the end of the year.

Concern that interest rates won't head lower anytime soon hurt shares of mortgage companies.

Federal Home Loan Mortgage Corp. slipped $2.625 to $84.50; Federal National Mortgage Association slid $1.875 to $31; Green Tree Financial Corp. gave up $1.375 to $32.375; and Countrywide Credit Industries Inc. fell 37.5 cents to $21.50.

The retreat was fueled by a recent surge in bond yields. The yield on the benchmark 30-year Treasury bond, down 4 basis points at 6.83 percent yesterday, was at 6.59 percent a week ago.

Assorted computer shares gained. Dell Computer Corp.'s stock rose $2.375 to $41.875 after Chairman Michael Dell told analysts that the company's sales to corporate customers remain strong and reports of price wars are exaggerated.

Digital Equipment Corp. rose 75 cents to $54. The company's decision to work with Microsoft's Windows NT computer language could increase demand for its Alpha chip, a Wall Street Journal article said.

Semiconductor and cellular telephone maker Motorola Inc. fell 75 fTC cents to $51.50. After the close of trading, the company said first-quarter earnings rose to 63 cents a share, eclipsing the 57 cents analysts expected. Motorola said it would have earned 61 cents for the quarter if not for a lower corporate tax rate.

Also after the close, the Semiconductor Industry Association said manufacturers booked $80 in new orders for every $100 in chips shipped last month, down from $89 in February. Analysts expected about $88 in new orders in March.

Texas Instruments Inc. closed the day up 50 cents at $53.125, and Micron Technology Inc. was off 87.5 cents at $32.875.

Pub Date: 4/10/96

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