Stocks fall as DuPont takes a tumble Dow industrials drop 85 points, to 9,089

Nasdaq at new high

Wall Street

July 10, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks fell yesterday, after DuPont Co., the largest U.S. chemicals company, warned that its second-quarter earnings will be below analysts' forecasts.

The Dow Jones industrial average dropped 85.19 to 9,089.78, its biggest loss in almost three weeks. The Standard & Poor's 500 index declined 7.81 to 1,158.56.

The Nasdaq composite index gained 4.43 to 1,939.82, its second consecutive record.

Among other broad indexes, the Russell 2,000 index of small capitalization stocks inched up .03 to 460.00; the Wilshire 5,000 index lost 56.92 to 10,879.93; the American Stock Exchange composite index slid .74 to 727.91; and the S&P 400 midcap index added .03 to 369.64.

The Sun-Bloomberg Maryland index, which tracks the top 100 Maryland company stocks by market valuation, gained .82 to 232.96.

DuPont's shares fell $7 to $70.125 in composite trading on volume of 11 million, making it the eighth most active stock on U.S. markets. The shares' plunge accounted for 28 points of the Dow Jones industrial average's 85-point decline. It was was the company's biggest decline since the October 1987 market crash.

The maker of Stainmaster carpet fibers and owner of the Conoco Inc. oil company said it will earn less than the 99 cents a share it earned in the year-earlier quarter and fall considerably short of the $1.01 average estimate of analysts surveyed by First Call Corp.

The shortfall will break 16 straight quarters of record earnings. DuPont said the problems could persist for the rest of the year.

DuPont joined a long list of companies blaming profit problems on weak demand in Asia. Earnings also were hurt by low oil prices and the General Motors Corp. strike.

Analysts cut their forecasts on second-quarter profit growth for S&P 500 companies to 1.7 percent, from 2.3 percent last week and 3.6 percent the week before that, according to First Call Corp. Profits rose 11 percent in the second quarter of 1997.

Oil shares declined. Burlington Resources Inc., a Houston oil exploration company, reported earnings below analysts' expectations because of lower crude prices. Analysts said the disappointing results may portend trouble for the industry. Burlington fell $1.4375 to $41.0625; Exxon Corp. fell $1.4375 to $71.75; and Chevron Corp. lost $2.1875 to $81.

Advanced Micro Devices Inc. was the S&P 500's biggest loser, tumbling $2.25 to $15.875, after reporting a larger-than-expected second-quarter loss. AMD, Intel Corp.'s biggest rival in the semiconductor business, cited poor Asian sales.

Lucent Technologies Inc., a telecommunications equipment maker whose shares have more than doubled this year, fell 56.25 cents to $86.625.

Internet stocks declined for a third day, even after Yahoo! Inc. reported higher-than-expected second-quarter profit of $8.1 million. The No. 1 Internet directory, which has a market capitalization of $9 billion and an estimated 40 million users, rose almost $18 points before closing $2.1875 lower at $184.

Excite Inc. also lost early gains, falling $9.125 to $82.25 and Lycos Inc. fell $6.5625 to $70.9375. Only Netgravity Inc. managed to stay up; the provider of software for managing online advertising, which went public last month at $9, gained $2.875 to $24.875.

Dell Computer Corp., Gateway Inc. and other personal computer makers rallied to records as investors bet that sales of the machines will pick up in the next six months and PC inventories at distributors will decline. Dell jumped $3.50 to $99.875 and Gateway gained $2.125 to $61.875.

Photronics Inc. plunged $4.1875 to $17.6875 after the semiconductor equipment maker warned that its second-quarter per-share earnings will be as much as 35 percent below hTC analysts' forecasts. Photronics had been expected to earn 33 cents a share.

Pub Date: 7/10/98

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