Dow falls 9 points on worry about PCs Lower price tags raise concerns about holiday season profits

Wall Street

November 07, 1997|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks fell yesterday for the first time this month, led by personal computer makers, amid concern that lower retail prices will hurt profits this holiday selling season.

International Business Machines Corp. drew attention to falling prices when it introduced an Aptiva PC for $999, its first foray into the red-hot sub-$1,000 market.

The Dow Jones industrial average fell 9.33 to 7,683.24. IBM paced the decline, falling $1.6875 to $101.0625, and Hewlett-Packard Co., another PC vendor that sells a sub-$1,000 machine, fell $1.3125 to $63.625.

The Standard & Poor's 500 index declined 4.73 to 938.03. The Nasdaq composite index fell 13.89 to 1,623.44.

Among other broad market indexes, the Russell 2,000 index of small capitalization stocks fell 1.93 to 442.83; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq stock exchanges, lost 43.90 to 9,081,73; the American Stock Exchange composite index dropped 2.64 to 687.71; and the S&P 400 midcap index slid 1.99 to 325.13.

Most of the Nasdaq's losses came in its 100 largest companies -- including Intel Corp., Microsoft Corp. and Oracle Corp. -- which as a group fell 1.2 percent compared with 0.8 percent for the broader index.

Among personal computer makers, Compaq Computer Corp. dropped $1.50 to $65.4375. Dell Computer Corp., the top direct-mail retailer, declined $2.625 to $81. Dell doesn't offer a $999 computer.

Compaq, whose shares more than doubled this year, has fallen 16 percent since its high Sept. 22. Dell, whose shares have tripled, is down 21 percent from an Oct. 15 top.

Intel Corp. fell $1.125 to $73.50, its third straight decline. Analysts said company officials may issue a gloomy forecast at a meeting with analysts tomorrow because of the potential for lower demand in Southeast Asia and the popularity of cheaper personal computers.

Aluminum Co. of America fell $1.75 to $72.25 and was the top decliner in the Dow, after Tom M. Van Leeuwen, an analyst at Credit Suisse First Boston, said slack Asian demand is expected to hurt prices. Van Leeuwen cut his earnings forecast by 7.3 percent, though he maintained his "buy" rating, as recent price declines take into account the weaker outlook.

The biggest gainers were retailers, which rose on hopes that healthy employment trends will bring a strong holiday selling season this year.

Wal-Mart Stores Inc., which said sales in stores open more than a year climbed 6 percent in October, rose 81.25 cents to $36.875. Dayton-Hudson Corp., whose sales jumped 6.1 percent, gained $3.25 to $68.75. Kohl's Corp. reported a 14 percent jump, and its shares rose 68.75 cents to $69.4375.

Pub Date: 11/07/97

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