Stocks Fall After Dow's Best Week In Years

Industrials Lose 43 Points

Computer Shares Weak

Bond Yields Rise

April 22, 1997|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks fell yesterday as rising interest rates and sliding computer shares sent the Dow Jones industrial average down, after its best week since 1991.

The Dow fell 43.34 to 6,660.21. The Standard & Poor's 500 index fell 5.97 to 760.37. The Nasdaq composite index fell for the fourth time in five days, tumbling 18.62 to 1,203.95. Trading was light because of the Passover holiday, with some 397 million shares changing hands, below the three-month average of 499 million shares. Declining stocks outnumbered advancers 17 to 9.

Bonds yields rose on expectations that Federal Reserve policy-makers will raise interest rates in May to head off inflation.

Lackluster demand for $12 billion in Treasury bills auctioned by the government yesterday helped drive yields higher. Stocks look less attractive to investors when bonds, seen as less risky, offer competitive returns.

The yield on the 30-year Treasury bond rose to 7.09 percent from 7.05 percent on Friday.

"The U.S. bond market is the smartest in the world, and they are expecting a rate increase, which hurts stocks," said John Hammerschmidt, a money manger at $2.5 billion Turner Investment Partners.

Leading the Dow lower, United Technologies Corp. fell $2.38 to $71.63, International Business Machines Corp. lost $2.38 to $137.38 and Philip Morris Cos. fell $1.75 to $42.63.

3Com Corp. fell $2.88 to $26.38 and U.S. Robotics Corp. lost $5.69 to $45.06 after Intel Corp. cut prices on a competing networking product, stackable hubs.

Hubs, an older form of networking technology, still account for about 20 percent of 3Com's revenue, said Chris Stix, an analyst at Cowen & Co.

3Com plans to buy U.S. Robotics for $6.6 billion in stock.

Texaco shares rose 75 cents to to $104.38 after the petroleum giant won a billion-dollar tax battle with the U.S. government. The Supreme Court rejected the Internal Revenue Service's appeal in a dispute about income from foreign refining subsidiaries in the late 1970s and early 1980s.

Exxon shares fell 12.5 cents to to $53.375 after the largest U.S.-based oil and gas producer reported profit of 87 cents a share, 5 cents ahead of the average forecast.

Maryland stocks fell, led by Sinclair Broadcast Group-A and Snyder Communications Inc.

The Bloomberg Maryland Stock Index, a price-weighted list of companies with operations in the region, fell 1.29 to 149.02.

Sinclair Broadcast Group-A fell $2.50 to $25. Snyder Communications fell $1.88 to $22.50.

The Bloomberg Maryland Stock Index was developed with a base value of 100 as of Dec. 30, 1994.

Pub Date: 4/22/97

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