Dow falls 26 points Nasdaq hits record

Earnings disappointments weaken the industrials

September 24, 1997|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks fell yesterday amid reports of weaker-than-expected earnings from Aetna Inc., Data General Corp., Delta Air Lines Inc. and Micron Technology Inc.

The Dow Jones industrial average fell 26.77 to 7,970.06. Union Carbide Corp., which warned of a profit shortfall last week, led the 30-company average lower, falling $1.6875 to $47.3125.

The Nasdaq composite index rose 7.91, or 0.5 percent, to 1,697.36, a record, led by Intel Corp., up $2.75 to $99.125, and Microsoft Corp., up $2.1875 to $135.50.

Aetna, Data General and Micron, all of which face lowered earnings forecasts by analysts, were the biggest percentage losers in the Standard & Poor's 500 index, which retreated 3.50 to 951.93.

Aetna slumped $9.0625 to $93.6875 in trading of 8.4 million shares as Merrill Lynch & Co. cut earnings estimates for this year, citing sluggish revenue growth. Data General dropped $4.1875 to $29.375 after Merrill Lynch analysts lowered estimates for the company's earnings.

Among broad market indexes, the Russell 2,000 index of small capitalization stocks added .44 to 448.98, a record; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq stock exchanges, lost 26.70 to 9,195.63; the American Stock Exchange composite index dropped 4.49 to 685.45; and the S&P 400 mid-cap index slid 1.76 to 331.26.

On the New York Stock Exchange, 1,553 stocks dropped and 1,308 rose.

Airlines have been among the market's top performers this month, and they gave back gains yesterday after Delta Air Lines said earnings for its current quarter will miss analyst expectations and be less than the year-ago period because of lower revenue. Competition from low-priced companies such as Southwest Airlines Co. was blamed for the shortfall.

Delta stock fell $4.625 to $102.0625 after hitting a record $107.125 Friday.

Southwest Airlines shares retreated 93.75 cents to $31.0625.

The American Stock Exchange airline index, up 37 percent this year, fell 9.85, or 1.7 percent, to 546.23.

Micron Technology, a maker of memory chips, said earnings for the quarter ended Aug. 28 rose to 33 cents a share, less than the average estimate of 48 cents. Micron shares sank $3.4375 to $37.0625.

Micron Electronics Inc., which is part owned by Micron Technology and builds computers, said net income for its fourth fell to 16 cents, 2 cents below the average estimate.

Micron Electronics dropped $1.3125 to $19.25.

Hvide Marine Inc. led companies related to the oil-service business lower. The provider of marine towing and transportation services to offshore oil companies fell $3.125 to $33 after it said it expects third-quarter earnings to be "somewhat below analysts' expectations."

Transocean Offshore Inc. fell $1 to $48.9375, and Smith International Inc. fell $1.3125 to $76.25.

Rohr Inc. rose 37.5 cents to $30.375 yesterday after not trading Monday, when B. F. Goodrich Co. announced it had agreed to buy the maker of jet-engine housings for $1.3 billion in stock and assumed debt.

CompUSA Inc. rose $2.50 to $35.375 after the computer superstore retailer said its board authorized the repurchase of $60 million of its common shares, about 2 percent of the total outstanding.

BellSouth Corp. rose 28.125 cents to $47.5625 after it said it plans to buy back $1 billion in stock by the end of 1998.

Stanhome Inc., a marketer of branded gifts and collectibles, dropped $3.5625 to $30.1875 after saying slower sales and a charge will cause it to post a loss for the quarter.

Morgan Stanley, Dean Witter, Discover & Co. dropped 50 cents to $55.9375 even as it reported that net income rose 51 percent amid record profits in its securities and asset management business.

Pub Date: 9/24/97

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