Stocks fall amid worry about Asia Dow industrials have only down-day of week, losing 66 points, to 7,906

Wall Street

January 31, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks fell on concern that profit growth will slow as Asia's financial crisis takes a bite out of U.S. economic growth in months to come.

The Dow Jones industrial average declined for the first time this week, losing 66.52 to close at 7,906.50. International Paper Co. -- and General Motors Corp., which do best when the economy is picking up, were among the biggest losers.

Concern that Asia will be a drag on the U.S. economy took the steam out of a rally that sent the Dow industrials up 272 points in the first four days of the week and carried the Standard & Poor's 500 index Thursday to its first record since Dec. 5.

GM fell $2.1875 to $57.9375 yesterday, and International Paper lost $2 to $45.6875.

The S&P 500 fell 5.21 to 980.28, leaving its gain for the week at 2.4 percent. The Nasdaq composite index fell 0.13 to 1,619.36, and added 2.8 percent for the week.

The Nasdaq rose 3.1 percent in the first month of the new year, triple the S&P 500's gain. The Dow gained 2.7 percent this week, finishing January with a 1.75-point loss after dropping 327 points in the first nine days of the month.

Among other broad market indexes, the Russell 2,000 index of small capitalization stocks lost 1.94 to 430.05; the Wilshire 5,000 index dropped 31.69 to 9,340.80; the American Stock Exchange composite index slipped 1.44 to 668.42; and the S&P 400 mid-cap index slid 0.47 to 326.70.

Volume on the New York Stock Exchange yesterday was 613 million shares.

Declining and advancing issues were almost evenly matched on the Big Board -- 1,465 down and 1,490 up -- indicating that investors weren't very pessimistic about stocks.

Some stocks, including computer disk-drive makers, gained as investors concluded that the shares already reflect the worst possible news. Western Digital jumped $1.625 to $18.875 after reporting unexpectedly strong fiscal second-quarter earnings. The stock fell 44 percent last year amid rising competition and falling prices for computers and the parts that go into them.

Western Digital's rivals also rose: Seagate Technology Inc. jumped $2.5625 to $23.1875 and Quantum Corp. climbed $3.125 to $24.375. The American Stock Exchange's disk drive index soared 6.5 percent.

FDX Corp. fell 56.25 cents to $65.0625 after its express-delivery unit, Federal Express Corp., said slowing Asian economies are hurting its operations there more than it anticipated, and will probably hurt earnings through much of this year.

Loral Space & Communications fell 6.25 cents to $22.0625 in the wake of the satellite maker's announcement late Thursday that its Space Systems/Loral unit has halted work on three satellites for Asian buyers and will cut up to 300 jobs, or 9 percent of its work force.

Drug shares declined after four days of gains. Schering-Plough Corp. fell $2.625 to $72.375 and Bristol-Myers Squibb Co. lost $1.8125 to $99.6875. Merck & Co. fell 50 cents to $117.375.

VeriSign Inc. jumped $11.50 to $25.50 in its first day of trading, buoyed by optimism that its product for protecting Internet communications will be in demand as electronic commerce expands. Microsoft Corp. is one of the company's main backers.

Organogenesis Inc. rose $2.625 to $22.0625 after the biotechnology company won the backing of a Food and Drug Administration panel for Apligraf, an artificial skin product for healing leg sores.

Anadigics Inc. plummeted $19.6875 to $14.125 after the maker of wireless-phone equipment said it could report a loss this quarter because customers are cutting orders and turning to rivals.

Schlumberger Ltd., an oil service company, fell $2.375 to $73.6875.

Vesta Insurance Group Inc. tumbled $7.375 to $56.50 after the property and casualty insurer's lower-than-expected fourth-quarter earnings turned analysts less optimistic about its prospects.

Pub Date: 1/31/98

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