Blue chips tumble Dow falls 57 points

But computer issues rebound to push Nasdaq index higher

March 21, 1997|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks fell again yesterday after Federal Reserve Chairman Alan Greenspan signaled that the central bank is poised to raise interest rates to head off a run-up in inflation.

A rebound in computer-related shares such as Sun Microsystems Inc. and Cisco Systems Inc. helped temper the drop in the broad market, and sent the Nasdaq composite index up 9.97 to 1,259.26, its first gain in eight days.

The Dow Jones industrial average fell 57.40 to 6,820.28. The 30-stock average has lost 135 points, or 1.9 percent, in three days on concern that interest rates could be headed higher.

Shares of Philip Morris Cos. and other tobacco shares paced the market's retreat. The stocks fell amid concern that the acknowledgment by Brooke Group Ltd.'s Liggett unit that cigarettes are addictive will weaken the industry's legal defenses.

The Standard & Poor's 500 index dropped 3.12 to 782.65. Coca-Cola Co. slipped 62 1/2 cents to $59; General Electric Co. lost 87 1/2 cents to $102.625; and Wal-Mart Stores Inc. fell 50 cents to $29.375. The index, considered by money managers the best gauge of the U.S. stock market's performance, is down 4.1 percent from its Feb. 18 record.

Feeding the Nasdaq's climb, Oracle Corp. rose 50 cents to $39.875; Ascend Communications Inc. rallied $4.50 to $50.25; U.S. Robotics Corp. jumped $2.25 to $56.375; Micron Technology Inc. climbed 37 1/2 cents to $38.75; and Adaptec Inc. rallied $3.9375 to $37.375.

Among broad U.S. stock indexes, the Russell 2,000 index of small capitalization stocks gained 0.52 to 353.31; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq stock exchanges, fell 14.72 to 7,453.85; the American Stock Exchange composite index lost 0.24 to 591.55; and the S&P 400 mid-cap index gained 0.94 to 259.88.

About 1,551 stocks fell and 945 stocks gained on the New York Stock Exchange. About 497 million shares traded, about average for the past three months.

Shares of AMR Corp. rallied $1.75 to $86.375 on news of its American Airlines unit reaching a tentative contract agreement with its pilots' union.

AMR shares had fallen $1.625 Wednesday.

Among tobacco stocks, RJR Nabisco Holdings Corp. fell 75 cents to $31.50; Loews Corp. fell $2.25 to $98.50; and UST Inc. fell $1.125 to $27.75.

Brooke Group was the exception, rising 50 cents to $4.875.

On March 13 last year, Brooke Group said it was negotiating settlements to the leading lawsuits filed against the tobacco industry. The Standard & Poor's tobacco index lost about 16 percent of its value over a 12-day stretch that month. The index rallied 36 percent since then to close at 2051.53 yesterday.

Philip Morris shares returned 31.33 percent during the last year, well above the 23 percent return for the S&P 500 index. Yet, since March 11, the company's shares have fallen 18 percent.

The yield on 30-year Treasury bills rose 3 basis points to 6.95 percent.

Pub Date: 3/21/97

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