NEW YORK -- U.S. stocks fell again yesterday as economic reports ignited concern about inflation, drove up interest rates and gave investors little incentive to buy stocks.
Banks such as NationsBank Corp. and Banc One Corp. were among the biggest losers as rising bond yields cut the value of their bond holdings and were seen damping demand for loans.
The Dow Jones industrial average dropped 58.70 to 7,848.01; the Standard & Poor's 500 index fell 6.57 to 937.91; and the Nasdaq composite index fell 8.52 to 1,678.89.
Among broad market indexes, the Russell 2,000 index of small capitalization stocks slid 0.66 to 447.92; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq stock exchanges, lost 98.17 to 9,097.46; the American Stock Exchange composite index slipped .83 to 685.24; and the S&P 400 mid-cap index dropped 1.11 to 328.46.
NationsBank Corp. shares lost $1.50 to $62, and Banc One fell $1 to $53.5625. Among personal-loan companies, Household International Inc. slumped $2.9375 to $110; Beneficial Corp. dropped $1.75 to $75.6875; and Countrywide Credit Industries Inc. lost 75 cents to $35.75.
The yield on the benchmark 30-year Treasury bond rose 8 basis points to 6.39 percent, for the bond's worst decline in a month, as reports showed orders for long-lasting goods such as aircraft and electronic equipment climbed more than expected.
Falling bond yields helped the Dow Jones industrial average rally 22 percent so far this year.
A survey of weekly jobless claims showed a surprising drop, also suggesting that the economy is expanding at a brisk pace. Fast growth often is linked with rising prices, and weakness in bonds, though inflation has been limited most of this decade.
High bond yields also hurt consumer goods companies such as Procter & Gamble Co. and Merck & Co., which are seen as alternative investments to bonds. P&G fell 43.75 cents to $68.50 and Merck dropped $2.125 to $99.125.
Stocks that declined outnumbered those that advanced by 1,501 to 1,379 on the New York Stock Exchange in trading of 525 million shares.
A warning of slower sales took a chunk out of Cognos Inc., a maker of database-management software. Ottawa-based Cognos plummeted $10.6875 to $22.0625.
Weak profits and more muted outlooks in recent days hurt companies such as Gucci Group NV, the Italian fashion shop, and Aetna Inc., a health insurer.
Gucci fell 75 cents to $46.625 after falling $10.875 Wednesday. Aetna dropped $2.50 to $90.125, its fifth straight decline.
Intel Corp. fell $2.50 to $93.125 on news that the Federal Trade Commission has begun a wide-ranging investigation of Intel's business practices, the second inquiry in six years.
3Com Corp. dropped $2.3125 to $50.25 after Schroder & Co. analyst Gina Sockolow cut her earnings estimate for the current quarter, the fiscal year and next fiscal year. She maintained her "significantly outperform" rating.
AgriBioTech Inc. fell 62.5 cents to $9.875 after the maker of products used in farming and ranching said its loss for the fiscal fourth-quarter ended June 30 narrowed to 7 cents a share from 18 cents in the year-earlier quarter.
GelTex Pharmaceuticals Inc. rose $3.75 to $26 after it said preliminary analysis of phase II data suggests that its cholesterol reducer administered at low doses has a significant effect on cholesterol levels.
General Signal Corp. fell $1.0625 to $42.4375 after the maker of motors, electrical controls and other equipment said it plans to spin off its GS Networks unit and sell three other businesses to focus on industrial products. The company also said it plans to double its share-buyback program.
Tele-Communications Group Inc. Class A shares jumped $1.0625 $20.75 after it pledged to buy back 5 percent of its Class A and Class B stock.
Pub Date: 9/26/97