Stocks fall as Dow tumbles 100 points Worries about Japan depress profit outlook, but Nasdaq rises 8 points

Wall Street

June 20, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks fell yesterday on concern that plans to fix Japan's ailing economy won't take effect soon enough to help U.S. corporate earnings in coming months.

Cooper Industries Inc. tumbled after warning that its second-quarter profit will be disappointing, partly because of slow Southeast Asian orders.

The Dow Jones industrial average fell 100.14 to 8,712.87. The 30-stock average dropped for a second day after jumping 164 points Wednesday, and lost 1.4 percent for the week.

The Standard & Poor's 500 index fell 5.72 to 1,100.65. It gained 0.2 percent this week.

The Nasdaq composite index rose 8.59 to 1,781.29 yesterday and gained 2.1 percent this week.

Walt Disney Co. fell $4.4375 to $107.5625, leading the Dow industrials lower, after Goldman, Sachs & Co. analyst Richard P. Simon cut his 1998 earnings estimates on the company.

Cooper Industries was the biggest decliner in the S&P 500, dropping $7.25 to $56 after the maker of Champion spark plugs and other auto parts said earnings are being hurt by a slowdown of orders from Southeast Asia, greater competition in domestic markets and work stoppages at General Motors Corp. plants.

GM fell $2.0625 to $67.50, bringing its loss since the strike began June 5 to 10 percent.

Pfizer Inc. fell $2.875 to $111.50 after failing to win marketing approval from the U.S. Food and Drug Administration for its schizophrenia drug Zeldox. The decision boosted Eli Lilly & Co., which makes a competing drug, $1.4375 to $66.5625.

Among other broad market indexes yesterday, the Russell 2,000 index of small capitalization stocks fell 1.32 to 438.47; the Wilshire 5,000 index slid 37.60 to 10,326.86; the American Stock VTC Exchange composite index added 2.63 to 693.97; and the S&P 400 midcap index lost 1.54 to 348.72.

Microsoft Corp. rose $3.50 to $94.6875 after Goldman analyst Richard G. Sherlund raised his fourth-quarter earnings estimate on the software company to 48 cents a share from 46 cents.

WorldCom Inc. rose $1.3125 to $47.0635. European Union regulators plan to approve the company's proposed $42.7 billion purchase of MCI Communications Corp. in the next few days after MCI answers further questions on its offer to sell its Internet business, said an EU official close to the negotiations. MCI rose $1.8125 to $56.50.

Overseas markets fell. Japan's Nikkei 225 index fell 0.6 percent, South Korea's benchmark index lost 3.8 percent and Thailand's slumped 3.7 percent. In Europe, Britain's FT-SE 100 index fell 1.1 percent, Germany's DAX Xetra index slid 0.8 percent and France's CAC 40 index dropped 0.6 percent.

Declining issues led advancers by 3-to-2 on the New York Stock Exchange, where some 695 million shares changed hands.

Camco International Inc. rose $12.4844 to $74.7344 after Schlumberger Ltd., the largest oil field-services company, agreed to buy Camco for $3.14 billion, or $82.52 a share, in stock. Schlumberger fell $3.6875 yesterday to $66.25.

Xtra Corp. soared $14.9375 to $61 after Interpool Inc. and Leon Black's Apollo Management LP agreed to buy the lessor of trailers and freight containers for $1.9 billion in stock and assumed debt, or $65 a share.

Merck & Co. fell $2 to $126.875. Astra AB said it will buy Merck's half of their U.S. sales venture for at least $4.4 billion in cash in 2008. While Merck will benefit from the sale, some investors said they would have preferred an immediate buyout.

Circus Circus Enterprises Inc. rose $1.625 to $17.875 after Business Week reported that Hilton Hotels Corp. approached Circus Circus again about buying it for about $28 a share, or $2.66 billion. Hilton fell 50 cents to $30.5625.

Iomega Corp. fell 81.25 cents to $5.50 after the maker of computer data storage devices forecast a wider-than-expected loss for the second quarter.

Pub Date: 6/20/98

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.