Stocks end mixed Dow inches to new record

Investors concerned

rising bond yields spur bank losses

March 12, 1997|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks were mixed yesterday as rising bond yields spurred losses in Chase Manhattan Corp. and other financial companies. Boeing Co. gained, helping the Dow Jones industrial average eke out a second straight record.

Signs of robust economic growth triggered concern among investors that the Federal Reserve may raise interest rates later this month to head off inflation.

"Higher yields are starting to bite into stocks," said David Rolfe, chief investment officer at Wedgewood Partners Inc., which manages $75 million. "A 7 percent yield and a 7,000 Dow don't mix."

The Dow industrials rose 5.77 to 7,085.16, after briefly climbing past 7,100 for the first time. Were it not for gains in Boeing and Procter & Gamble, the 30-stock average would have fallen about six points. Texaco Inc. and Merck & Co. were the Dow's biggest decliners.

Boeing rallied $2.375 to $108.50 after the company said it is competing with Airbus Industrie to become the exclusive aircraft supplier to Delta Air Lines Inc., a relationship that would produce an estimated $6 billion in initial orders.

The Standard & Poor's 500 index fell 2.31 to 811.34 in a seesaw session in which it rose 1.25 at one point. The Nasdaq composite index fell 5.96 to 1,316.76. Hurting both indexes, Cisco Systems Inc. fell 62.5 cents to $52.75; Amgen Inc. fell $1.50 to $61.25; and Applied Materials Inc. slid $2.125 to $51.625.

Among broad U.S. stock indexes, the Russell 2,000 index of small capitalization stocks rose 0.78 to 367.87; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq exchanges, fell 15.89 to 7,741.15; the American Stock Exchange composite index lost .20 to 603.43; and the S&P 400 midcap index rose 0.05 to 267.82.

About 1,319 stocks rose and 1,194 shares fell on the New York Stock Exchange, where 493.2 million shares changed hands. The three-month daily average is 492 million shares.

Among the day's most active stocks was Nike Inc., which dropped 50 cents to $66.50 in trading of 8.16 million shares. The sneaker and apparel maker's stock fell $4 amid speculation that Woolworth Corp.'s Foot Locker chain had cut orders. Woolworth denied the rumor and Nike shares battled back.

Bank shares were among the day's biggest losers, as the yield on the benchmark 30-year Treasury bond rose four basis points to 6.85 percent. LJR Redbook Research said retail sales in the first week of March rose 1.4 percent from February, prompting concern that a pickup in spending will spur inflation.

Chase Manhattan fell $3.125 to $106.50; NationsBank Corp. fell $1.25 to $63.75; Republic New York Corp. slid 87.5 cents to $97.50; and BankAmerica Corp. fell $3.375 to $119.625.

Supreme International Corp. rallied $2.25 to $16 after the sportswear maker said earnings in the fourth quarter ended Jan. 31 rose to 36 cents a share from 7 cents, topping the 32 cents analysts expected.

Niagara Mohawk Power Corp. slid 75 cents to $8.625; PanEnergy Corp. slid 50 cents to $43.25; and Consolidated Edison Co. of New York dropped 12.5 cents to $30.25. The Dow Jones utilities average fell 1.40 to 225.12, and is now down 15.73 points, or 6.5 percent, since Jan. 22.

Great Atlantic & Pacific Tea Co. fell $1.625 to $29.625. The supermarket said fourth-quarter earnings were 60 cents a share, below analysts' estimates of 64 cents.

Safeguard Health Enterprises Inc. dropped $2.375 to $12.625. The health-care services company said its fourth-quarter net income fell to 5 cents a share from 15 cents a year ago, below the average Wall Street estimate of 22 cents.

Herbalife International Inc. rallied $1.25 to $19.125. The nutritional products marketer said Chairman and Chief Executive Mark Hughes decided against a plan to sell as much as one-quarter of his shares.

Pub Date: 3/12/97

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