Apple is only winner on S&P 500 Merck, J. P. Morgan pace Dow fall

semiconductor, multinational firms hit

Wall Street

October 28, 1997|By BLOOMBERG NEWS

NEW YORK -- Merck & Co. and J. P. Morgan & Co. led the Dow Jones industrial average lower yesterday, and Apple Computer Inc. was the only stock in the Standard & Poor's 500 index to rise.

"I smell a whiff of panic in the air," said David Dreman, chairman of Dreman Value Management LLC, which oversees $3.8 billion. "Investors finally realize the market is overpriced."

The Dow industrials fell 554.26 to 7,161.15. The Standard & Poor's 500 index declined 64.66, or 6.87 percent, to 876.98 and the Nasdaq composite index suffered its worst one-day point drop ever, falling 115.78, or 7 percent, to 1,535.09.

Yesterday's decline was so widespread that only 158 of the 3,397 stocks on the NYSE showed a gain.

Multinational companies dropped on concern that overseas profits may lag. General Electric Co. dropped $4 to $61.9375; Caterpillar Inc. fell $5.125 to $52.8125; and General Motors Corp. dropped $4.0625 to $64.

Shares of big banks dived as investors fled from companies whose assets could suffer from Asia's economic woes. Citicorp, the most global of the nation's banks, tumbled $13.3125 to $123.3125. About 23 percent of Citicorp's 1996 income came from Asia.

J. P. Morgan, which drew 15 percent of last year's profit from Asia, fell $7.9375 to $108.

Before the NYSE's shutdown, the rout spurred a wave of trading activity. Some 685.5 million shares changed hands, putting the day among the busiest in the market's history.

Merck fell $8.375 to $85. Patents on drugs accounting for one-quarter of Merck's sales will expire in 2000 and 2001, and Christina Heuer, an analyst at Smith Barney Inc., cut the firm's investment recommendation on the drugmaker. Earlier this month, the company's third-quarter earnings fell short of forecasts.

Oxford Health Plans Inc. paced the market's decline, tumbling $42.875 to $25.875 after it forecast a third-quarter loss. The stock lost about $3.35 billion of its value, and went from having a 17 percent gain for the year to a 56 percent loss.

Oxford was the day's most active stock, as more than 49 million shares changed hands.

Apple, whose shares have been sliding downward for seven straight sessions, closed up 18.75 cents yesterday at $16.75 on trading of 2.9 million.

Semiconductor stocks tumbled for a second session after Intel said it was postponing the opening of a $1.3 billion plant because of flagging demand for some of its chips.

The Philadelphia semiconductor index dived 9.8 percent, as Texas Instruments Inc. fell $9.125 to $102.75; Novellus Systems Inc. dropped $5.125 to $43.25; and Intel slumped $5.25 to $74.75.

After Oxford Health, yesterday's most active stocks were Intel, Applied Materials Inc., Compaq and Dell Computer.

At least one company cited a slump in its shares as a reason to buy back its stock. Stac Inc., a software company, said it will spend $10 million to buy back shares.

Advanta Corp. fell $3.1875 to $33.50 even though the credit card company may be the target of Fleet Financial Group Inc. Fleet is close to buying Advanta for more than $1 billion in cash and assumed liabilities, according to people familiar with the situation.

CFX Corp. rallied $1.9375 to $24.625. Peoples Heritage Financial Group Inc. agreed to buy the bank holding company for $703 million, or about $28.76 a share.

Eagle Financial Corp. rose $4.50 to $47.50. Webster Financial Corp. offered to acquire the banking company for $55.44 a share, or $362 million in stock. Webster Financial slid $7.25 to $58.75.

Ihale Therapeutic Systems dropped $2.50 to $26.50. The drug-delivery products maker said it agreed to renegotiate the terms of its collaboration with Baxter International Inc.

Pub Date: 10/28/97

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