Dow falls 90 points, Nasdaq advances Southwest leads airlines lower after oil production accord

March 24, 1998|By BLOOMBERG NEWS

NEW YORK -- Most U.S. stock prices fell yesterday after some of the world's largest oil producers unexpectedly agreed on production cuts to boost prices. Southwest Airlines Co. led a decline in airlines, whose profits are tied to fuel prices.

The Dow Jones industrial average tumbled 90.18, or 1 percent, to 8,816.25, after setting records every day last week.

The Standard & Poor's 500 index fell 3.61, to 1,095.55. The Nasdaq composite index rose 3.35 to 1,792.51, helped by gains in computer-related shares that dominate the index.

Among other broad market indexes, the Russell 2,000 index of small capitalization stocks slid .29 to 473.96; and the Wilshire 5,000 index lost 31.48 to 10,424.40.

The American Stock Exchange composite index gained 7.48 to a record 735.27 and the S&P 400 mid-cap index added .30 to 365.81, just two-hundredths of a point shy of its record close.

The Bloomberg Maryland index, which tracks the top 100 stocks in Maryland by market valuation, lost 0.70 to 236.06.

Decliners outnumbered advancers eight to seven on the New York Stock Exchange in trading of 631 million shares.

Saudi Arabia, Venezuela and Mexico led a group of major oil exporters that pledged to cut output by 1.275 million barrels a day, or 1.7 percent of daily output.

Mobil Corp rose 81.25 cents to $79.375, and Exxon Corp. gained $1.3125 to $68.625 on the NYSE. Schlumberger Ltd., an oil services company, soared $4.6875 to $78.25. Smith International Inc., a drilling equipment supplier, rose $4.50 to $58.125.

Shares of airlines and other transportation companies fell on concern that higher fuel costs would hurt earnings. Southwest Airlines lost $1.875 to $28.25 and US Airways Group Inc. dropped $2.5625 to $70.875. FDX Corp., formerly Federal Express Corp., fell $2.1875 to $67.8125.

Networking, telecommunications and software companies got a boost when Morgan Stanley & Co. analyst Alkesh Shah raised his earnings estimates for Lucent Technologies Inc. Lucent rose $3.8125 to $124.

3Com Corp., which supplies data, voice and communications technology, rose $1.9375 to $35.125. Novell Inc., which sells networking software products, rose 56.25 cents to $10.625.

Compaq Computer Corp. rose $1.4375 to $24.6875 after its $8.48 billion acquisition of Digital Equipment Corp. won approval from the European Commission.

Walt Disney Co. fell $4.25 to $102.75 after a report that its reported profit in the past five quarters was enhanced because of an undisclosed reserve of as much as $2.5 billion.

J. P. Morgan & Co. dropped $3.8125 to $135, and other banks declined. Higher oil prices are seen as inflationary and possibly leading to higher interest rates.

Coca-Cola Co. fell $1.6875 to $75.8125 after an analyst lowered earnings forecasts because of the negative effect of foreign exchange. Lehman Brothers Inc. analyst Michael J. Branca lowered his 1998 basic earnings per share estimate to $1.63 from $1.72 and the 1999 estimate to $1.90 from $2.03, based on meetings with senior management.

Retail stocks were weak. Sears, Roebuck & Co. fell $1.25 to $57.625. Gap Inc. fell $1.50 to $44.1875.

Northrop Grumman Corp. rose 50 cents to $107.50 on news that the government sued to block Lockheed Martin Corp.'s $12 billion purchase of the military electronics and aerospace company because of antitrust concerns.

Boeing Co. fell $1.8125 to $51.625 after it said bottlenecks are delaying deliveries of more than 50 of its latest 737 planes.

Caterpillar Inc. rose 18.75 cents to $56.25 after the heavy-construction equipment maker's United Auto Workers union approved a six-year contract.

Circus Circus Enterprises Inc. fell $3 to $21.75 after Hilton Hotels Corp. ended talks to buy the casino company.

Pub Date: 3/24/98

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