Dow drops 207 points in broad decline Except for Russell 2,000, indexes lose more than 2%

yen at lowest level since '90

Wall Street

June 16, 1998|By BLOOMBERG NEWS

NEW YORK -- Broad market indexes plummeted across the board yesterday, following the Dow Jones industrial average and the Standard & Poor's 500 index lower.

The Russell 2,000 index of small capitalization stocks lost 7.73 to 433.86; the Wilshire 5,000 index dropped 210.75 to 10,105.45; the American Stock Exchange composite index skidded 13.52 to 683.88; the S&P 400 midcap index slid 7.08 to 344.93; and the New York Stock Exchange composite index fell 11.78 to 554.89.

All but the Russell lost more than 2 percent.

The Bloomberg Maryland index, which tracks the top 100 stocks in Maryland by market valuation, skidded 3.78 to 223.81, its lowest point since the end of February.

The Dow lost 207.01 points to 8,627.93 and the S&P 500 dropped 21.83 to 1,077.01.

The yen fell to its lowest level against the dollar since August 1990, sending stock markets tumbling 4 percent or more in Hong Kong, Malaysia, South Korea, Thailand and the Philippines. Investors worry that Japan's recession and weak currency will make it tougher for other Asian countries to rebound.

Oil and oil field service and equipment stocks led the S&P 500 index lower, as crude oil fell $1.03 to $11.56 a barrel, its lowest price in 12 years.

A United Nations official said he hopes to clear Iraq of possessing banned weapons, which could lead to a lifting of export sanctions, allowing Iraq to sell more oil in an oversupplied market.

Chevron Corp. lost $1.9375 to $79.4375; Royal Dutch Petroleum Co. dropped $2 to $53.5625; and British Petroleum PLC's American depositary receipts fell $2.375 to $83.

Oil field service and equipment companies dropped, too. Schlumberger Ltd. sank $3.9375 to $68.8125; Varco International Inc. lost $2.0625 to $18.875; and Global Marine Inc. fell $1.8125 to $18.125.

The drop in oil prices benefited some airlines. Southwest Airlines Co. rose 56.25 cents to $29 and AMR Corp., parent of American Airlines, gained $1.625 to $79.3125.

Two multibillion-dollar mergers moved stocks in the telephone and communications equipment industries.

Bay Networks Inc., the third largest U.S. maker of computer networking equipment, rose $2.4375 to $30.75 after it agreed to be acquired by Canada's Northern Telecom Ltd. for $7.27 billion, or $32.55 a share, based on Northern Telecom's closing price yesterday. Northern Telecom shares traded in New York tumbled $9.4375 to $54.25.

Excel Communications Inc., the fifth largest U.S. long-distance phone company, fell $5.8125 to $21.75 after it agreed to be acquired by Teleglobe Inc., a Canadian phone company for US $3.64 billion. The purchase price is $22.95 a share -- a 17 discount to Excel's closing price on Friday of 27.6875. Teleglobe rose 50 cents to $52.125.

McDonald & Co. rose $2.125 to $32.9375 after KeyCorp agreed to buy the regional brokerage for $721 million, or $35 a share, in stock. Both companies are based in Cleveland.

Albank Financial Corp. soared $13.25 to $64.75 after Charter One Financial Inc. agreed to buy the Albany, N.Y., bank for $1 billion, or $73.58 a share, in stock. Charter One fell $2.875 to $31.1875.

Sunbeam Corp. fell $2.3125 to $15.75 after the maker of Mr. Coffee machines and Coleman camping products said it will report a second-quarter operating loss and probably won't meet its financial goals for the year. The company fired Chairman and Chief Executive Al Dunlap, who failed to produce a profit for the company during the last six months.

Broderbund Software Inc. fell $3 to $17.1875 after the developer of entertainment and education software said it expects a third-quarter loss of 12 cents to 15 cents a share. Analysts surveyed by IBES International Inc. forecast the company would earn 2 cents a share.

Broderbund said it hired Donaldson, Lufkin & Jenrette Inc. "to explore strategic alternatives." The stock rose 19 percent Friday on speculation that Broderbund will be acquired.

A few computer-related stocks, which suffered the most in the market's decline in the last 7 1/2 weeks, gained. Some investors say the stocks are now cheap.

Novellus Systems Inc., which makes equipment used to produce computer chips, rose $2 to $33.25 and VLSI Technology Inc. rose 37.5 cents to $15.625.

Semiconductor stocks are 42 percent below their peak last summer, as measured by the Philadelphia Stock Exchange's semiconductor index.

Internet stocks gained. The stocks have been a favorite of "momentum" investors, who look to buy shares of stocks that already have risen more than the market and have a hot concept like retailing over the Internet.

Online bookseller Amazon.com Inc., up 118 percent for the year, rose $4.75 to $65.75 and Infoseek Corp., up 203 percent, rose $2.50 to $32.625.

Pub Date: 6/16/98

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