Asia, official's words set stocks back Markets in Japan, Korea fall

Rivlin questions value of shares

Dow off 92.92

Wall Street

May 07, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks fell again yesterday as tumbling Asian markets and remarks by Federal Reserve Vice Chairman Alice Rivlin ignited concern that profit growth may slow.

American Express Co. and other companies that do business in Asia led the decline. Chrysler Corp. gained after the third-largest U.S. automaker said it's in talks that may lead to its acquisition by Daimler-Benz AG.

Stock markets in Japan and Korea had fallen more than 2 percent overnight, as investors doubted whether the economies in those countries will rebound enough to spur demand for U.S. goods and prevent financial transactions in the region from going bad.

The Dow Jones industrial average fell 92.92 to 9,054.65, led by American Express. The Standard & Poor's 500 index fell 10.58 to 1,104.92 and the Nasdaq composite index dropped 8.23 to 1,856.68.

Among other broad market indexes, the Russell 2,000 index of small capitalization stocks lost 2.37 to 479.37; the Wilshire 5,000 index dropped 85.88 to 10,548.39; the American Stock Exchange composite index slipped 1.95 to 743.33; and the S&P 400 midcap index slid 2.76 to 373.31.

The Bloomberg Maryland index, which tracks the top 100 stocks in Maryland by market valuation, fell 2.96 to 239.62.

Chrysler rallied $7.1875 to $48.625, bringing its gain for the year to 38 percent. Daimler's American depositary receipts, each equal to one ordinary share, climbed $6.50 to $108.5625.

Volvo AB's receipts rose $2.25 to $32.4375 and Fiat SpA's ADRs added $1.375 to $22.375.

The other two U.S. automakers declined. General Motors Corp. fell 50 cents to $67.9375 and Ford Motor Co. lost 12.5 cents to $45.75.

Some three stocks fell for every two that rose on the New York Stock Exchange, where about 606 million shares changed hands, above Tuesday's 573 million.

Stocks extended losses in late trading after Rivlin said stock market values are "hard to justify."

The Dow industrials have more than doubled since May 1995, and 1997 capped the best three-year run in the 30-stock average since the 1930s.

American Express fell $2.9375 to $99.50.

Citicorp fell $1.6875 to $148; Chase Manhattan Corp. fell $2 to $135; BankAmerica Corp. slipped $2.25 to $82.3125; and J.P. Morgan & Co. fell $1.6875 to $132.875.

Bucking the trend, Golden State Bancorp Inc. rose 62.5 cents to $39.50 and Sovereign Bancorp added 28.125 cents to $18.75.

Seagram Co. fell $1 to $41.3125. The maker of Tropicana juices and owner of Universal Studios reported a third-quarter loss as economic turmoil in Asia cut liquor sales in the region.

Pfizer, which makes the impotence drug Viagra, fell $2.875 to $108.875.

EntreMed Inc., which soared Monday on news it's developing a promising treatment for cancer, tumbled $12 to $31.125.

Microsoft Corp. slid $1.375 to $86.375 after Chairman Bill Gates told the U.S. Justice Department's antitrust chief that blocking the release of Windows 98 would disrupt the computer industry.

Computer Associates International Inc. fell 81.25 cents to $60.3125, and BMC Software Inc. dropped $2.1875 to $89.5625.

Cisco Systems Inc. rallied $2.375 to $76.

The No. 1 computer-networking company said it earned 45 cents a share in the fiscal third quarter, topping analysts' forecasts by a penny, as it gained new customers and added profitable products.

In Asia, Japan's Nikkei 225 stock index fell 2.3 percent to 15,243.84. South Korea's Kospi index fell 4 percent to 376.23. The Kospi has declined 34 percent in two months.

Indonesia's benchmark Jakarta Stock Market composite index fell 4.7 percent as a third day of rioting in Medan, the nation's third-biggest city, sparked worries about the country's political stability.

Pub Date: 5/07/98

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