U.S. stocks take tumble for second day in row Computer-chip makers lead continuing drop

Dow falls 76.23 points

Wall Street

May 16, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks fell again, led by computer-chip makers, after National Semiconductor Corp. warned it will lose money until the end of August.

The pessimistic outlook from one of the nation's biggest semiconductor companies followed unexpectedly weak earnings from personal-computer maker Hewlett-Packard Co. Investors are concerned that weak Asian economies are hurting demand for computer products.

The Dow Jones industrial average fell 76.23 to 9,096.00, extending Thursday's 39.61-point slide. The 30-stock average had set a record Wednesday.

The Standard & Poor's 500 index slumped 8.64 to 1,108.73. The Nasdaq composite index declined 18.59 to 1,846.77.

For the week, the Dow added 40 points. The S&P 500 was little changed, up 0.59, and the Nasdaq fell 17.60.

Among other broad market indexes, the Russell 2,000 index of small capitalization stocks fell 3.11 yesterday to 472.44; the Wilshire 5,000 index lost 80.29 to 10,536.97; the American Stock Exchange composite index dropped 4.29 to 737.09; and the S&P 400 midcap index slid 3.54 to 368.52.

The Bloomberg Maryland index, which tracks the top 100 stocks in Maryland by market valuation, slipped 0.78 to 237.99.

Walt Disney Co. accounted for more than one-quarter of the Dow's decline, falling $5.4375 to $110.625. Jessica Reif Cohen of Merrill Lynch & Co. cut her investment rating on the stock to "neutral" from "accumulate," noting concern over the cost of rights to air National Football League games on ABC and ESPN.

National Semiconductor fell $1.5625 to $17.3125 after the company said earnings will be hurt by slowing sales of its chips to personal-computer makers. The company was expected to report a loss of 19 cents a share in its fourth quarter ending May 31 and a profit of 3 cents a share in its first quarter.

Intel Corp. fell $4.25 to $80.3125; Texas Instruments Inc. fell $3 to $59.125; Micron Technology Inc. dropped $2.1875 to $26.375; and KLA-Tencor Corp. slumped $1.5625 to $38.4375.

About nine stocks fell for every five that rose on the New York Stock Exchange, where about 621 million shares changed hands. About 618 million shares changed hands daily on the Big Board during the past three months.

Concern that civil unrest in Indonesia will hurt U.S. exporters that business in the region contributed to the decline. About 30 percent of the computer-chip industry's sales are made to the Asia-Pacific region.

Dell Computer Corp. slid $5.25 to $90; Compaq Computer Corp. lost $1.1875 to $30.375; and Hewlett-Packard Co. fell 87.5 cents to $69.4375 after tumbling $11.3125 Thursday. Cirrus Logic Inc. fell 6.25 cents to $11.1875.

Microsoft Corp. was an exception, climbing 50 cents to $89.4375. The company is negotiating with U.S. antitrust enforcers and state attorneys general, after persuading them to delay a lawsuit over its business practices.

Boeing Co. fell 25 cents to $49.625 after Singapore Airlines Ltd. agreed to buy up to 10 A340-500 long-range jetliners from Airbus Industrie in an order possibly worth $2.2 billion.

Xybernaut Corp. was among the U.S. stock market's most-active stocks for a second day, falling $1.4375 to $7 in trading of 26.6 million shares. The stock soared 184 percent Thursday after the company told investors that Sony Digital Products Inc. finalized plans to make Xybernaut's wearable computer, designed for mobile workers who need use of their hands.

Philip Morris Cos. fell $1 to $35.25, bringing its loss for the year to 21 percent. The maker of Marlboro cigarettes revised its first-quarter results to account for a $492 million charge to pay for its share of the tobacco industry's settlement with Minnesota.

Yesterday's most-active stocks in U.S. trading were Dell Computer, Xybernaut, Intel, Biocontrol Technology Inc. and FPA Medical Management Inc.

Pub Date: 5/16/98

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