Dow Jones average declines to 5,681.31 Stocks dip after jury rules against tobacco firm

Wall Street


NEW YORK -- U.S. stocks suffered a late decline yesterday as a jury dealt the tobacco industry a stunning defeat in a product liability case, a decision that sent shares of Philip Morris Cos. and other cigarette companies reeling.

The slump came after a Florida jury found B.A.T Industries PLC unit Brown & Williamson negligent in the case of a smoker who developed cancer.

Losses in Exxon Corp. and dozens of computer-related stocks worsened the slide.

The Dow Jones industrial average slumped 32.18 to 5,681.31, trimming the week's gain to just 1.48.

The maker of Marlboro cigarettes fell $3.50 to $102 before trading was halted at 3: 36 p.m. Eastern time on the New York Stock Exchange. It fell another 11.125 points to 90.875 in after-hours trading, equal to a 33-point loss in the Dow industrials and signaling a weaker stock market first thing Monday morning.

All told, the total value of Philip Morris shares fell by $12.1 billion.

The Standard & Poor's 500 Index fell 0.49 to 662.10 and the Nasdaq composite index eased 0.24 to 1,137.27.

The Russell 2,000 index of small capitalization stocks rose .09 to 327.44; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq exchanges, dropped 6.16 to 6,473.95; the American Stock Exchange market value index fell .97 to 550.80; and the S&P midcap index rose .22 to 228.34.

Only 327 million shares changed hands on the New York Stock Exchange, well below this year's average of 410 million. Advancers beat decliners by more than 6 to 5 on the New York Stock Exchange.

Other tobacco makers tumbled. RJR Nabisco Holdings Corp., owner of the Camel brands, slid $4.25 to $28; Loews Corp., parent of cigarette maker Lorillard Inc. and maker of Kent and Newport cigarettes, sank $3.625 to $78.875; UST Inc., parent of U.S. Tobacco, skidded $2.125 to $31.75 before being halted on the New York Stock Exchange.

American Brands Inc. slid $1.75 to $44 and Universal Corp., a tobacco processor, dropped $1.25 to $26.875. B.A.T, formerly British-American Tobacco Co., owner of American Tobacco and Brown & Williamson, dropped 31.25 cents to $15.625.

Computer stocks fell after a report showed weaker-than-expected report demand for semiconductors last month, darkening the outlook for industry profits. Late Thursday, a Semiconductor Industry Association report said a seven-month industry slowdown deepened in July.

Novellus Systems Inc. fell $2.875 to $38.125 and LSI Logic Corp. dropped $1.125 to $22.625.

Micron Technology Inc. sank 87.5 cents to $24.625; National Semiconductor Corp. receded 75 cents to $15.50; Integrated Device Technology Inc. fell 37.5 cents to $9.75; Cypress Semiconductor Corp. dropped 50 cents to $11.875; and Alliance Semiconductor Corp. fell 31.25 cents to $6.375.

Pub Date: 8/10/96

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