Computer shares fall, cause drop in Nasdaq But Dow gains 22 points as bond yields offset Asian crisis worries

Wall Street

June 02, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks were mixed yesterday, as falling bond yields offset concern that slumping economies in Asia will mean lower-than-expected U.S. corporate profits.

Computer shares declined for the 11th time in 12 days, led by Intel Corp. and Dell Computer Corp.

The Dow Jones industrial average gained 22.42 to 8,922.37; the Standard & Poor's 500 index rose 0.16 to 1,090.98; and the Nasdaq composite index tumbled 32.05 to 1,746.82, led by Intel, down $3.4375 to $68.

Among other broad market indexes, the Russell 2,000 index of small capitalization stocks slid 5.45 to 451.17; the Wilshire 5,000 index lost 34.28 to 10,279.90; the American Stock Exchange composite index dropped 7.09 to 707.51; and the S&P 400 midcap index declined 3.58 to 354.57.

The Bloomberg Maryland index, which tracks the top 100 stocks in Maryland by market valuation, fell 2.65 to 227.53.

Volume on the Big Board totaled 536.5 million shares, down from the daily average of 612.1 million shares over the past three months. Three stocks fell for every two that rose on the New York Stock Exchange.

Investors bought utility and telephone stocks as they sought investments that might hold up in a market made volatile by a steepening decline in Asian economies. Utilities benefited from a drop in bond yields to four-month lows. The Dow Jones utilities average rose 2.5 percent to a record.

American Electric Power Co. gained $1.9375 to $47.3125; Consolidated Edison Inc. rose $2 to $44.8125; and Duke Energy Corp. rose $2.0625 to $59.6875.

While computer-related companies fell from the opening bell, the large multinational stocks that make up the Dow industrials and the S&P 500 seesawed back and forth. The Dow industrials rose as much as 81 points by midday and fell as much as 35 points in the afternoon before recovering.

Intel slumped on news late Friday that the world's biggest semiconductor maker will delay its advanced Merced processor by at least six months. Dell has been falling since it reported two weeks ago that prices for its computers dropped more than expected.

Microsoft Corp. lost $1.0625 to $83.75; Applied Materials Inc. lost $2.0625 to $29.9375; and Xerox Corp., up 34 percent this year, tumbled $3.5625 to $99.3125.

Iomega Corp., which makes devices that store computer data, tumbled 62.5 cents, or 9.8 percent, to $5.75 after the company said it cut prices on its newest Jaz disk drives to boost slumping sales.

In Hong Kong, the Hang Seng index tumbled 3.6 percent on concern that government measures to boost real estate won't be enough to head off a recession. Japan's Nikkei 225 index slumped 2.2 percent. The benchmark Russian Trading System index fell 8.3 percent as expectations waned for a debt bailout package.

Travelers Group Inc., a U.S. brokerage, insurance and finance company, gained $1.75 to $63, leading the Dow average's gain, after it said it will buy 25 percent of Nikko Securities Co., Japan's third-largest brokerage, for $1.6 billion.

Minnesota Mining & Manufacturing Co., also a member of the Dow, rose $1.50 to $94.125. Analyst Alex Henderson at Prudential Securities Inc. said he was encouraged by 3M's comments about its Asia business, and predicted that the stock will reach $110 in 12 months.

The yield on the 30-year Treasury bond fell to 5.78 percent after hitting a four-month low of 5.77 percent.

Pub Date: 6/02/98

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