Stocks fall after slipping on oil patch Dow industrials shed 63 points, to 7,730

crude hits 4-year low

Wall Street

January 23, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks fell yesterday for a second day, led by shares of oil industry companies such as Exxon Corp. and Schlumberger Ltd., as crude prices dropped to four-year lows.

Unexpectedly weak profits and gloomy forecasts from retailer Sears, Roebuck & Co., software company Sybase Inc. and computer chip maker Altera Corp. contributed to the decline.

The Dow Jones industrial average dropped 63.52, to 7,730.88. Philip Morris Cos., maker of Marlboro cigarettes, was the average's biggest loser, falling 2.3125, to 41.9375 on the second day of Minnesota's trial to recoup health-related costs from tobacco companies. The Standard & Poor's 500 index slid 7.74, to 963.04, and the Nasdaq composite index dropped 11.41, to 1,576.51.

Among other broad market indexes, the Russell 2,000 index of small capitalization stocks lost 3.69, to 426.20; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq stock exchanges, dropped 69.59, to 9,196.76; the American Stock Exchange composite index slid 3.83, to 665.61; and the S&P 400 mid-cap index lost 3.09, to 321.49.

Oil companies such as Exxon, down $1.50, to $59.5625, and the companies that perform their engineering work led the decline in the S&P 500, as crude prices fell to $16.04 a barrel on the New York Mercantile Exchange.

Schlumberger, one of the oil industry's biggest engineering and technology companies, reported disappointing earnings and said its customers may cut spending because of weaker demand in Asia. Schlumberger tumbled $9.75, to $71.75; Smith International Inc. lost $7.25, to $49.50; and Cooper Cameron Corp. dropped $5.6875, to $51.6875.

Diamond Offshore Drilling Inc. dropped $4.9375, to $39.875, after its fourth-quarter earnings per share fell 2 cents short of expectations. The oil and gas drilling contractor said higher rig maintenance costs and downtime would persist through 1998.

Tobacco shares fell on concern that industry documents released in the Minnesota trial may jeopardize a proposed national settlement. RJR Nabisco Holdings Corp., maker of Camel cigarettes, slipped $1, to $33.8125.

Slumping Asian markets set the stage for the decline in U.S. shares. Indonesian stocks suffered their biggest drop in two weeks, sending the Jakarta Stock Exchange composite index down 4.8 percent. Diminishing confidence in Indonesia's ability to avoid a wave of corporate bankruptcies led to a plunge in the rupiah against the dollar.

Sybase fell $1.9219, to $7.7656, making it the biggest loser among the 100 biggest Nasdaq stocks. The database-software company said Wednesday that it will report a large fourth-quarter loss and must restate revenue for the first three quarters of 1997 after learning that its Japanese unit improperly stated $65 million in sales.

Altera lost $3.625, to $30.9375, after reporting unexpectedly low earnings as sales of its specialty computer chips slumped in Asia.

Sears fell 87.5 cents, to $45.0625, after warning that profit will fall substantially in the first quarter. The retailer said first-quarter earnings will suffer because more customers are falling behind on their credit-card payments.

United Asset Management Corp. fell $1.50, to $21.8125, after it warned that 1998 earnings will be $1.15 to $1.25 a share, far below the average forecast of $1.51, because two of its mutual funds are losing assets.

Newhall Land & Farming Co. dropped $1.0625, to $28.9375, after saying that first-quarter earnings are "expected to be minimal."

Planet Hollywood fell $3.3125, to $7.125, after the movie-theme restaurant chain said fourth-quarter and 1998 earnings will be far below expectations because sales slumped.

United Technologies Corp. jumped $3, to $74.625. The aerospace- and automotive-parts maker said fourth-quarter earnings rose to 97 cents a diluted share, exceeding analysts' estimates of 92 cents.

Pub Date: 1/23/98

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