Stocks fall with Dow losing 92 points Investors retreat amid earnings worries fueled by strong dollar

January 16, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks fell yesterday for the first time this week after a batch of companies, including Eastman Kodak Co. and Data General Corp., warned investors of lower profits in the months ahead.

Kodak's forecast came on the back of a disappointing fourth-quarter earnings report. A strong dollar has made the products of Kodak and other U.S. exporters more expensive overseas.

The Dow Jones industrial average fell 92.92 to 7,691.77; the Standard & Poor's 500 index dropped 7.21 to 950.73; and the Nasdaq composite index fell 1.70 to 1,547.06.

Among other broad market indexes, the Russell 2,000 index of small capitalization stocks slipped 0.18 to 421.75; the Wilshire 5,000 lost 51.59 to 9,079.75; the American Stock Exchange composite index slid 3.10 to 655.54; and the S&P 400 mid-cap index dropped 1.25 to 318.74.

ADC Telecommunications Inc. was the most active stock in the United States, tumbling $5.5625 to $30.4375 as more than 20 million shares changed hands. Investors are concerned that Baby Bell phone companies recently cut purchases of telecommunication equipment, which could mean weak profits for ADC in the quarter ended Jan. 31.

ADC's competitors also fell. Teltrend Inc. lost $1.50 to $15; Tellabs Inc. dropped $1.8125 to $49.4375; Lucent Technologies Inc. dropped $3.4375 to $75.0625; and Northern Telecom Ltd. slid $1.9375 to $42.5625.

Markets in Indonesia, Hong Kong and Malaysia declined on doubts that Indonesian President Suharto will carry through on a pledge to institute the economic changes sought by international lenders. Hong Kong's Hang Seng index fell 7 percent; Indonesia's Jakarta Stock Exchange composite index lost 4.14 percent.

Microsoft Corp. gained $1.1875 to $132.3125 after a poll commissioned by Fortune magazine found that 73 percent of the American public consider Microsoft one of the best businesses, even though it is in a confrontation with antitrust regulators.

Kodak fell $1 to $58.50 after reporting that it earned 76 cents a share in the fourth quarter, a penny above expectations, but that its first-quarter earnings are likely to be hurt.

Data General, a member of the S&P 500, slumped $2.8125 to $14.0625 after the computer company said it expects per-share earnings for the first quarter ended Dec. 27 to be "below the low end" of analyst estimates.

Among utility stocks, Ipalco Enterprises Inc. hit a 52-week high of $42.50 yesterday before dropping back 31.25 cents to $41.75.

Concern over Asia was evident in the decline of Powerwave Technologies Inc., which fell $3.5625 to $10.4375, even after the company said it earned 29 cents a share in the fourth quarter, a penny better than estimates. The wireless equipment company told analysts that the slowdown in Asia will hurt overseas orders.

Digital Equipment Corp. rose $1.875 to $39.375 after the computer and networking products company's earnings met expectations even though Asian sales declined "in the double digits" after years of double-digit growth. The company said it doesn't expect the decline to be as steep in coming months.

RJR Nabisco fell $1.1875 to $36.50; Philip Morris Cos. slid $2.25 to $44.75; and UST Inc. fell $1.125 to $35.25.

Cognizant Corp. rose $1.125 to $46 after the U.S. market research provider said it will break itself into two separately traded public companies, IMS Health and Nielsen Media Research, to enable each unit to grow faster.

OHM Corp. climbed $1.75 to $10.875 after International Technology Corp. offered to buy the environmental services company for $11.50 a share in cash and stock.

Capital One Financial Corp. rallied $4.50 to $59.5625 after the credit card company reported better-than-expected fourth- quarter earnings, citing improved credit quality in its portfolio.

Pub Date: 1/16/98

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