NEW YORK -- The Dow Jones industrial average lost an early gain yesterday and tumbled more than 100 points for the second time this week, before partially recovering to close with a loss of 68.08 points.
The Dow closed at 7,689.98, in a session marked by a midafternoon slide of 128.92 points and an earlier gain of 54 points. The 30-stock average rose 153 points Tuesday, after diving 192 points Monday.
"The market's acting schizophrenic," said David Rolfe, chief investment officer at Wedgewood Partners Inc., which oversees about $80 million. "With stocks at records, a lot of people are trying to come to grips with whether the market is overvalued or undervalued."
A slump in bonds sent interest rates higher yesterday and fueled the stock market's retreat. Rising yields make it more expensive for companies to borrow, which eventually hurts profits.
The Standard & Poor's 500 index fell 7.35 to 888.99 after climbing to 902.09, a record. The Nasdaq composite index fell 6.19 to 1,446.24, after rising 6.42 points to a record.
Broad market indexes fell as well. The Russell 2,000 index of small capitalization stocks dropped 2.08 to 391.22; the Wilshire 5,000 index fell 53.65 to 8,407.21; the American Stock Exchange composite index lost 0.62 to 619.24; and the S&P 400 mid-cap index slipped 1.38 to 287.08.
Yesterday's biggest decliners were oil shares. The slide came even as the Organization of Petroleum Exporting Countries said it will keep its oil production target unchanged until the end of the year, a bid to revive sagging oil prices.
Exxon Corp. slid $1.5625 to $60.9375; Mobil Corp. dropped 87.5 cents to $70.125; Chevron Corp. dropped 43.75 cents to $73.8125; Amoco Corp. fell 68.75 cents to $87.5625; and Texaco Inc. slid 43.75 cents to $111.375.
About four stocks fell for every three that rose on the New York Stock Exchange, where about 608 million shares changed hands.
The day's biggest loser and most active stock was Liposome Co., which tumbled $15.25 to $9.5625. The company said a trial of its Ventus respiratory drug found patients on a placebo did just as well.
Philip Morris Cos. slid $1 to $43.1875. An influential health advisory panel called last week's landmark tobacco settlement flawed because it wouldn't give the government enough authority to regulate nicotine. RJR Nabisco Holdings Corp. fell $1 to $33.375 and UST Inc. dropped 37.5 cents to $28.375.
Paper stocks fell on concern that prices for pulp will slide this summer and hurt profits, analysts said. Georgia-Pacific Corp. slid $2.4375 to $87.75; Buckeye Cellulose Corp. lost $1.875 to $34; International Paper Co. slipped 75 cents to $50.125; and Westvaco Corp. fell 62.5 cents to $32.0625.
Bonds fell as the Treasury, state of New Jersey and other borrowers raised $15 billion in the bond market, and the yield on the benchmark 30-year Treasury bond rose to 6.73 percent from 6.69 percent Tuesday.
Motorola, which makes semiconductors and cellular phones, rose $3.625 to $75 after Smith Barney Inc. raised its 18-month target for the stock to $120 from $94.
Other chip makers gained as well. Micron Technology Inc. rose $1.6875 to $42.625 and Applied Materials Inc., which manufactures chip making equipment, gained $1.375 to $73.375.
Imation Corp., a maker of computer-storage and imaging products spun off from Minnesota Mining and Manufacturing Co., fell $1.3125 to $24.125. The company said second-quarter earnings and sales will fall short of Wall Street estimates.
BEA Software Inc. slid $2.375 to $14.25. The software company filed to sell 6 million shares in a secondary stock offering.
Dean Foods Co. rallied $2 to $42 on better-than-expected earnings.
Gadzooks Inc. tumbled $15.50 to $20.125. The retailer of clothing for teen-agers said it expects second-quarter earnings to fall below analysts' estimates because of weak June sales.
Pub Date: 6/26/97
