Stocks fall amid concern for earnings Dow industrials lose 23 points, to 9,025

Nasdaq drops 1.07%

Wall Street

July 03, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks declined yesterday in the third-lightest trading session of the year, after government reports on jobs and manufacturing suggested that profits could suffer from a slowing economy.

Parametric Technology Corp. was the biggest decliner, after warning that its earnings are being hurt by slack demand for its software in Asia.

The Dow Jones industrial average fell 23.41, to 9,025.26. The Standard & Poor's 500 index dropped 2.14, to 1,146.42. The Nasdaq composite index had its biggest loss since June 15, sliding 20.46, or 1.07 percent, to 1,894.00.

Among other broad market indexes, the Russell 2,000 index of small capitalization stocks fell 1.54, to 458.31; the Wilshire 5,000 index lost 22.10, to 10,764.72; the American Stock Exchange composite index slipped 1.39, to 721.92; and the S&P 400 midcap index slid 0.24, to 365.42.

The Bloomberg Maryland index, which tracks the top 100 stocks in Maryland by market valuation, lost 0.56, to 232.01.

With many traders off early for the Independence Day holiday, volume on the New York Stock Exchange was just 509 million shares, below the three-month daily average of 607 million. Advancers outnumbered decliners on the Big Board by a 15-to-14 margin.

The yield on the 30-year treasury bond declined 2 basis points yesterday to 5.60 percent.

Parametric, which makes software that helps engineers design cars, planes and heavy equipment, tumbled $8.75, to $16.0625. The company said third-quarter revenue and earnings will be unexpectedly low. A shift to a new product did not help.

CompUSA said it will report an unexpected loss in the fiscal fourth quarter because of falling personal computer prices and weak demand, and its shares fell 68.75 cents, to $16.875, bringing its decline for 1998 to 46 percent.

Microsoft Corp. dropped for the first time in a week, sliding $2.125, to $107.25.

Intel Corp. declined $1.9375, to $73.25, after the world's largest maker of semiconductors said it will shut plants in Oregon for 10 days this month to reduce inventories of older-model chips.

For the holiday-shortened week, the Dow gained 80.72, or 0.9 percent; the S&P rose 13.22, or 1.2 percent; the Nasdaq added 24.47, or 1.3 percent; and the Russell 2,000 index gained 8.04, or 1.8 percent.

The Russell is up 5.6 percent since June 15, but it is just 4.9 percent higher for the year so far. The S&P, a barometer of the shares of the nation's largest companies, is up 18 percent this year.

Analysts' expectations for growth in second-quarter operating earnings for the S&P 500 dropped to 2.3 percent this week from 3.6 percent last week, because of the General Motors Corp. strike and the economic downturn in Asia, according to First Call Corp.

Sun Microsystems Inc. and International Business Machines Corp. declined yesterday after Salomon Smith Barney Inc. analyst John B. Jones Jr. lowered earnings estimates for the companies -- both of which have extensive operations in Asia.

IBM fell $1.5625, to $115.1875, and Sun dropped $2.4375, to $42.50.

KLA-Tencor Corp. declined $1.75, to $26, after the company said its quarterly results will be below expectations because of a slowdown in orders from chipmakers. KLA-Tencor said it expects revenue to fall about 10 percent from the previous quarter. KLA is among the largest semiconductor equipment companies.

Netscape Communications Corp. surged for a second day, on speculation that the Internet browser pioneer may attract an investment from a large media company. Netscape rose $5.625, to $41.3125, up 55 percent for the holiday-shortened week.

U.S. Industries shares tumbled $5.6875, to $19.9375, after the company said it will take $180 million in charges over two quarters for acquisitions, staff cuts and writing down assets from a discontinued furniture line.

Pub Date: 7/03/98

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