Stocks slide amid concerns of rate rise Investors fear slowed profit growth

Dow falls to 9,147.57 after 4-day rally

May 06, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks fell yesterday for the first time in five sessions on concern that interest rates may rise, putting a clamp on profit growth. Citicorp, BankAmerica Corp. and other banks retreated.

The Dow Jones industrial average slumped 45.09 to 9,147.57, after rallying 3.3 percent in the previous four sessions. The Standard & Poor's 500 index fell 6.42 to 1,115.65 and the Nasdaq composite index dropped 13.95 to 1,864.91.

Among other broad market indexes, the Russell 2,000 index of small capitalization stocks lost 3.72 to 981.74; the Wilshire 5,000 index dropped 58.57 to 10,634.27; the American Stock Exchange composite index slipped 3.52 to 745.28; and the S&P 400 midcap index slid 2.10 to 376.07.

The Bloomberg Maryland index, which tracks the top 100 stocks in Maryland by market valuation, fell 1.84 to 242.58.

Some nine stocks fell for every five that rose on the New York Stock Exchange, where about 583 million shares changed hands, above the 551 million shares that traded yesterday.

The yield on the benchmark 30-year Treasury bond rose 5 basis points to 5.98 percent.

Citicorp fell $2.9375 to $149.6875; BankAmerica Corp. slid $1.9375 to $84.5625; and NationsBank Corp. fell $1 to $76.

Oil companies declined as the price of crude slumped 48 cents a barrel to $15.47. Analysts are becoming more pessimistic that a new round of cuts in global supply will be agreed upon soon.

The S&P international oil stock index fell 10.45, or 1.2 percent, to 854.10, after dropping 1.2 percent Monday. Amoco Corp. fell $1.0625 to $44.50; Exxon Corp. dropped 75 cents to $74; and Mobil Corp. slipped 25 cents to $81.0625.

EntreMed Inc. fell $8.6875 to $43.125 after the stock was downgraded to "neutral" from "venture" at Lehman Brothers Inc. On Monday, the stock soared $39.75 after the National Cancer Institute said two of the company's drugs offer the best hope for treating cancer.

lTC Other companies striving to develop cancer-fighting drugs also retreated. Boston Life Sciences Inc. fell $2.5625 to $5.0313; Celgene Corp. slid 50 cents to $10.50; and Sugen Inc. dropped 68.75 cents to $15.75.

An exception was Techniclone Corp., which rose 50 cents to $1.3438 in trading of 19.3 million shares. The biotechnology company said researchers found that the company's VTA technology might be ideal for delivering chemicals to destroy cancer tumors by cutting off the supply of blood. The study's results were published in Cancer Research magazine.

Pfizer Inc. fell 93.75 cents to $111.75. The maker of Viagra has seen its stock rally more than 50 percent this year on expectations that demand for the impotence drug will spur profits higher. Some 208,000 prescriptions for the drug were filled in the week ended April 24, almost double the week before.

Cendant Corp. slid $1 to $24.50 after the marketing and franchising company said accounting problems may hurt first-quarter profit. The problems forced Cendant to lower its reported 1997 earnings last month. On Monday, Cendant released "preliminary" first-quarter earnings that were in line with forecasts.

Among the bright spots yesterday, Donna Karan International Inc. rose $1.75 to $16. The apparel maker reported first-quarter net income of 10 cents a diluted share, more than the 5-cent average estimate of three analysts surveyed by IBES International Inc.

PacifiCare Health Systems Inc. Class B shares jumped $5.625 to $77.50 after the provider of managed-care services said first-quarter earnings fell 4.9 percent, less than expected, as it worked to integrate an acquired business and get a handle on rising medical costs.

And K-tel International Inc. shot up $11.1875 to a high of $78.9375, before losing all but 12.5 cents of the gain. The stock has risen 10-fold in four weeks.

Late last week, the company said its online music service acquired the rights to publish Billboard Magazine's weekly chart package on its Web site, another step the company is taking to profit from music sales on the Internet.

Yesterday's most active stocks in U.S. trading were Techniclone, Netscape Communications Corp., Compaq Computer Corp., K-tel and Microsoft Corp.

Microsoft fell 31.25 cents to $87.75 as 12.6 million shares traded.

Chairman Bill Gates said government interference with the scheduled May 15 introduction of the software giant's newest personal computer operating system would prevent Microsoft from improving its products.

Pub Date: 5/06/98

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