Retreating market falters again Nasdaq index staggered as investors unload technology issues

December 13, 1997|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks fell yesterday for the fifth day in a row, battered by the worsening economic crisis in Korea, as plunging technology shares sent the Nasdaq composite index to its worst weekly decline in seven years.

Cisco Systems Inc. and Microsoft Corp. led the drop.

"There's no doubt about it, technology is in a bear market," said Robert Streed, a money manager with Northern Trust Co. in Chicago, which oversees $130 billion, referring to a sustained period of stock market declines. "Investors are selling first and sorting things out later."

The Dow Jones industrial average fell 10.69 to 7,838.30, its fifth straight decline. The Dow lost 3.8 percent for the week. It was the first week since the five days ended March 21 that the 30-stock average lost ground in every session.

The Nasdaq composite fell 21.96, or 1.4 percent, to 1,536.58, bringing its loss for the week to 5.96 percent. It was the rTC Nasdaq's worst week since Aug. 24, 1990 -- in the month Iraq invaded Kuwait. The Standard & Poor's 500 index fell 1.55 to 953.39, down 3.1 percent for the week.

Among other broad market indexes, the Russell 2,000 index of small capitalization stocks slipped 2.07 to 422.63; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq stock exchanges, dropped 27.34 to 9,097.85; the American Stock Exchange composite index added 1.45 to 665.90; and the S&P 400 midcap index slid 2.12 to 320.22.

Semiconductor stocks, as measured by the Philadelphia semiconductor index, dropped 4.4 percent, and lost 15 percent for the week.

Intel Corp. fell $1.3125 to $70.50 yesterday; International Business Machines slid $1.25 to $100.375; and Texas Instruments Inc. lost $1.25 to $40.875.

Microsoft Corp. fell $2.3125 to $136.75 yesterday on news that it was ordered late Thursday to stop making computer makers install its Internet Explorer browser program as a condition for their getting the company's dominant Windows 95 operating system. Rival Netscape Communications Corp. rose $1.625 to $27.875 after the ruling.

Electronics for Imaging Inc. plunged $24.125, or 62 percent, to $14.875, after the company said fourth-quarter earnings will fall below analysts' forecasts because big Japanese customers are

delaying purchases. The company, which makes products for digital color printing over computer networks, had soared from $3.50 in April 1994 to $55.125 in September this year.

Cisco Systems dropped $6.125 to $76.5625 on concern about rising inventory of its products, although analysts said the buildup represents increased demand, not declining sales.

The yield on the benchmark 30-year Treasury dropped 8 basis points to 5.92 percent.

Goodyear Tire & Rubber Co. rose $1.375 to $66, reflecting investor confidence that the U.S. expansion can continue as it enters its eighth year.

Gannett Co. fell 12.5 cents to $59.3125 after the newspaper company said it expects slower profit growth in 1998 because of higher newsprint costs and slightly lower advertising. Most U.S. newspaper companies are projecting slower growth, in part because 1997 was one of the strongest years in industry history.

Federal Express Corp. rose $2.125 to $64.50 after it said its fiscal second-quarter net income rose 3 percent, less than analysts expected, as increased services pushed up costs. FedEx fell $5 Thursday in anticipation of the report.

Micro Warehouse Inc. lost 75 cents to $13.875 after the catalog retailer of computers, software and related products said it will take a fourth-quarter pretax charge of $68.0 million to shut its European headquarters in the United Kingdom and its operations in Australia and Japan.

Pub Date: 12/13/97

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