Dow falls third day in a row Investors concerned profits don't justify record share prices

Wall Street

March 28, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks fell on continuing concern that corporate earnings don't justify record share prices. Adobe Systems Inc. led the drop, after the software company said weak sales in Asia and North America would cut its profit in half.

The Dow Jones industrial average fell for a third straight day, losing 50.81 to 8,796.08 -- its first three-day slump since January. The Standard & Poor's 500 index fell 5.36 to 1,095.44 and the Nasdaq composite index dropped 4.92 to 1,823.62, its only decline this week.

While companies in the S&P 500 are expected to have average earnings growth of just 1 percent this quarter, the S&P 500 index is up 13 percent so far this year. The Dow is up 11 percent and the Nasdaq 16 percent.

For the week, the Dow lost 1.2 percent, the S&P 500 dropped 0.3 percent and the Nasdaq gained 1.9 percent.

Among other broad market indexes, the Russell 2,000 index of small capitalization stocks slid 0.66 to 477.15, its first loss in four sessions; the Wilshire 5,000 index lost 39.13 to 10,443.07; the American Stock Exchange composite index dropped 1.06 to 738.33; and the S&P 400 mid-cap index slipped 1.49 to 367.50. The NYSE composite index fell 2.41 to 569.80.

The Bloomberg Maryland index, which tracks the top 100 stocks in Maryland by market valuation, rose 1.26 to a record 237.31.

Decliners outnumbered those that gained by a 16-to-13 ratio on the New York Stock Exchange in volume of 582.2 million shares, down from 599.5 million Thursday.

Adobe Systems fell $2.50 to $45.50 and was the biggest loser in jTC the S&P 500, after the company said fiscal first-quarter earnings fell 50 percent, a bigger decline than analysts expected, on weak sales in Asia and North America. Adobe makes software to create documents with graphics.

Silicon Graphics Inc. fell 18.75 cents to $13.9375 after it said it will have a "significant" third-quarter loss and lower-than-expected sales because of declines in its workstation and supercomputer businesses. The computer company was expected to break even in the third quarter.

In Focus Systems Inc. fell $4.7188 to $9.4063 after the maker of personal-computer projectors warned it will have a first-quarter loss because of falling prices and slumping demand.

Tyson Foods Inc. fell 68.75 cents to $19.3125 after it said its fiscal second-quarter earnings will fall short of analyst estimates because of excess supplies of meat, the Asian economic crisis and absorbing its purchase of Hudson Foods Inc.

Oil companies fell as oil prices declined. Chevron Corp. dropped $1.25 to $83.0625 and Exxon Corp. lost 75 cents to $67.4375.

Pfizer Inc. rose $1 to $95.375 after the company announced it had government approval for its impotence drug, Viagra.

Bristol-Myers Squibb Co. dropped $2.5625 to $101.3125 after it said it won approval to advertise a new benefit of its cholesterol-lowering drug, Pravachol. The company's stock rose 61 percent in the past 12 months.

McDonald's Corp. rose $2 to $57.375, a day after it said it would cut jobs and introduce a cooking system designed to produce better food with less waste.

Columbia Sportswear Co. rose $3.9375 to $21.9375 in its first day of trading as investors bet the apparel company in Portland, Ore., will profit from the popularity of outdoor sports.

Pub Date: 3/28/98

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