Stocks fall as computers weaken Dow industrials drop 70 points, to 8,899

Maryland index gains

Wall Street

May 30, 1998|By BLOOMBERG NEWS

NEW YORK -- The Dow Jones industrial average retreated yesterday, led by International Business Machines Corp. and other computer shares, amid more concern that worsening political and economic turmoil in Asia could damage U.S. corporate profits.

Falling for the fifth time in six days, the Dow industrials tumbled 70.25 to 8,899.95.

The Standard & Poor's 500 index lost 6.77 to 1,090.82, and the Nasdaq composite index dropped 15.75 to 1,778.87.

Other broad market indexes were mixed.

The Russell 2,000 index of small capitalization stocks rose 0.81 to 456.62; the Wilshire 5,000 index lost 47.87 to 10,314.18; the American Stock Exchange composite index climbed 1.02 to 714.60; and the S&P 400 midcap index slid 0.37 to 358.15.

The Bloomberg Maryland index, which tracks the top 100 stocks in Maryland by market valuation, rose 1.41 to 230.18.

May was the worst month for the market since October, when Asia's financial troubles first took their toll on U.S. stocks. The Dow lost 1.8 percent; the S&P 500 fell 1.9 percent; and the Nasdaq lost 4.8 percent.

Computer companies, such as IBM, down $2.5625 to $117.50, were yesterday's biggest decliners.

Investors said concern is mounting that companies will soon announce disappointing second-quarter profits.

Intel Corp. fell $2.0625 to $71.4375. After the close of trading, Intel said its next-generation Merced chip will be delayed by six months, until the middle of 2000, because of complications with its design and production. Investors had been looking to the Merced chip as Intel's next major driver of revenue and profit.

Advancing stocks led decliners by a 4-to-3 margin on the New York Stock Exchange.

CVS Corp., a nationwide drugstore chain that is off 11 percent from its April 6 high, fell 12.5 cents yesterday to $70.1875.

Financial shares such as Fannie Mae gained as bond yields fell to their lowest levels in eight weeks. Fannie Mae, the world's largest buyer of single-family mortgages, rose 93.75 cents to $59.8125. The yield on the benchmark 30-year bond fell 2 basis points to 5.80 percent.

Aerospace parts maker AlliedSignal Inc., one of the 30 Dow industrials, rose $1.625 to $42.75 after announcing a $2.2 billion stock buyback.

Icos Corp. jumped $4.8125 to $21.0625 after James McCamant, a partner in American Health Care Fund LP, was quoted in Business Week as saying the drug company is worth $30 a share because of its products in development, including a potential rival to Pfizer Inc.'s Viagra impotence pill. The chief executive of ICOS is George Rathmann, a co-founder of biotechnology bellwether Amgen Inc.

Pfizer shares fell $1.75 to $104.875.

Boston Chicken Inc. lost more than one-third of its value after its independent auditor said there is substantial doubt about the ability of the operator of Boston Market restaurants to continue as a going concern. Boston Chicken shares fell $1.1875 to $2.0325, down from a high of $41 on Dec. 3, 1996.

Union Pacific Corp. declined $1.25 to $48.375 after the nation's largest railroad surprised analysts yesterday by saying it will report a second-quarter loss of unspecified size as congestion on its tracks persists. Analysts' estimates ranged from a loss of 25 cents to a profit of 75 cents in a survey by IBES International Inc.

Remec Inc. tumbled $6.50, or 31 percent, to $14.375, after the maker of microwave transmission systems told analysts and investors that it may suffer this quarter from delayed orders from two customers, Digital Microwave Corp. and Innova Corp.

"Things have to calm down in Asia before investors become more aggressive," said Joseph E. Stocke, a money manager at VTC Meridian Investment Co., which manages $2.5 billion.

Pub Date: 5/30/98

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