Stocks retreat in late sell-off Dow industrials slide 79 points, but Nasdaq ekes out another record

December 04, 1996|By BLOOMBERG BUSINESS NEWS

NEW YORK -- U.S. stocks tumbled yesterday in a late-day sell-off, after a reversal in Treasury bond prices and concern that a stronger dollar might erode corporate profits.

The Dow Jones industrial average fell 79.01 to 6,442.69, its biggest percentage drop since a 161-point plunge July 15. The Standard & Poor's 500 index fell 8.28 to 748.28, its largest decline in three months.

The Nasdaq composite index rose 0.55 to 1,300.37, its seventh consecutive record.

Concern that the U.S. dollar's recent rise might hurt multinational companies' earnings overseas battered such companies as General Electric Co., which lost $6.6 billion of its market value, falling $4 to $99.25.

U.S. Robotics Corp. shares slumped $7.125 to $73.75 on concern that sales in the current quarter may fall short of estimates.

Other computer stocks gave up much of their gains in turn, and the Morgan Stanley high-technology index dropped $2.20 to $405.68 after earlier gaining almost 10 points. Several series of computer-guided "sell" orders fueled the drop in the Dow industrials and S&P 500.

Still, advancing stocks outnumbered decliners on the New York Stock Exchange by almost 13 to 12. Big Board volume climbed to 516.2 million shares from 412.5 million yesterday.

The Wilshire 5,000 index of companies on the New York and American stock exchanges and Nasdaq Stock Market slid 45.11 to 7,250.46; the American Stock Exchange market value index lost .75 to 592.18; and the S&P mid-cap index dropped .10 to 257.31.

"This market's just been straight up for so long, you're going to get days like this," said Steve Mindnich, senior trader at Jefferies & Co. in Short Hills, N.J. The slump came as yields on benchmark 30-year Treasury bonds reversed course after falling to a 10-month low of 6.31 percent. The yield finished at 6.36 percent, unchanged from Monday.

International Business Machines Corp.'s sale of $850 million of 100-year bonds helped send yields higher, as did the U.S. dollar's decline against the Japanese yen. IBM fell 37.5 cents to $162.625.

Stocks gave back much of their early gains as the U.S. dollar sank 1.26 yen to 113.29. The dollar's gain against the yen since early August was credited with boosting both the Treasury bond market and stocks in recent months.

The market's biggest losses came in its largest stocks. GE, the largest company in terms of market capitalization, lost almost 4 percent of its value, which was $170 billion yesterday. GE's National Broadcasting Co. may try to buy USA Network from Viacom Inc. and Seagram Co.'s MCA Inc. unit, a report in Advertising Age said.

Viacom eased 25 cents to $36.875 and Seagram dropped 50 cents to $40. Among other large multinational companies, Royal Dutch Petroleum Co. slumped 42.50 to $166; Procter & Gamble Co. skidded $3.875 to $104.75; Walt Disney Co. dropped 42 to $71.875; and Pfizer Inc. declined $2.375 to $85.625.

NationsBank Corp. lost $2.75 to $100; Bank of Boston Corp. fell $2.50 to $66.50; and Boatmen's Bancshares Inc. fell $1.625 to $64.75.

Small- and mid-size companies' stocks registered the biggest gains, as they have since Nov. 26. The Russell 2000 index of small-company shares rose 2.49, or 0.7 percent, to 357.83.

Stocks showing the largest percentage gains yesterday included Summit Technology Inc., ahead $2.375, or 37 percent, to $8.75, after it received Food and Drug Administration approval to expand clinical trials of its treatment for far-sightedness.

Hutchinson Technology Inc. soared $19.50, or 37 percent, to $72.25 after it said it expects stronger first-quarter earnings.

Spyglass Inc. surged $43.50, or 28 percent, to $16.125. The company unveiled software products that let users connect to the Internet from pagers and televisions.

Pub Date: 12/04/96

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