Earnings worries pummel stocks Other indexes join Dow in slump

Sears among big losers

Wall Street

August 05, 1998|By BLOOMBERG NEWS

NEW YORK -- Investors showed no mercy yesterday to companies that gave any hint of falling short of earnings forecasts.

Sears, Roebuck & Co. fell $2.375 to $48.25 on concern that the largest U.S. department store chain's sales will fall short of analysts' forecasts.

SCI Systems Inc. plunged $7 to $32.8125 as analysts cut their earnings forecasts for the world's largest contract manufacturer of electronics for computer makers. The company said it had "significant" declines in prices in its fourth quarter ended in June amid an industrywide glut of PC hardware.

The Dow Jones industrial average plummeted 299.43, or 3.41 percent, to 8,487.31, as IBM fell $5.9375 to $126.8125, and J. P. Morgan & Co. lost $5.75 to $116.875. Both companies' earnings have suffered from Asia's recession.

Goodyear Tire & Rubber Co. fell $3.8125 to $56.875, after North America's largest tire maker said it will cut 600 jobs to cope with stagnant worldwide demand for tires.

General Nutrition Cos. shares fell $6.25 to $21.75, after the largest U.S. specialty retailer of vitamins and health products said its profit margin narrowed in the fiscal second quarter as it cut prices to compete with discount stores. General Nutrition faces increased competition from retailers such as Wal-Mart Stores Inc., which are selling vitamins at lower prices.

Mid Atlantic Medical Services Inc. fell $1.6875, or 22 percent, to $5.9375, after the managed health-care company said it expects second-quarter earnings to fall short of estimates.

Among other broad indexes, the Nasdaq composite tumbled 65.46, or 3.54 percent, to 1,785.64; the Russell 2,000 index of small capitalization stocks dropped 11.73, or 2.84 percent, to 401.63; the Wilshire 5,000 index plunged 362.63, or 3.51 percent, to 9,971.55; the American Stock Exchange composite index lost 19.11, or 2.74 percent, to 678.76; the New York Stock Exchange composite index fell 19.53, or 3.48 percent, to 541.36; and the S&P 400 midcap index skidded 11.02 to 332.27.

The Sun-Bloomberg Maryland index, which tracks the top 100 Maryland stocks by market valuation, slid 6.70, or 3.13 percent, to 207.33.

AMP Inc., the world's top maker of electronic connectors, soared $13.9375 to $42.5625 after AlliedSignal Inc., the world's 12th-largest aerospace company, offered to buy AMP for $44.50 a share, or $9.8 billion.

AlliedSignal said it's willing to wage a proxy fight for AMP, which has seen its profit fall and share price plummet amid Asia's economic slump. Its stock lost $3.5625 to $40.

Gold stocks rallied as gold for December delivery gained $4.60 to $292.50 an ounce on the New York Mercantile Exchange's Comex division.

Newmont Mining Corp. gained 81.25 cents to $18.6875 and Kin- ross Gold Corp. rose 25 cents to $2.5625.

The American Stock Exchange's gold index had its biggest advance in a month.

Amazon.com Inc. rose $1.625 to $109.875 as the No. 1 online bookseller said it will buy closely held PlanetAll and Junglee Corp. for about $280 million.

PlanetAll provides a Web-based address book, calendar and reminder service, while Junglee has a Web-based database that helps shoppers find millions of products on the Internet.

Pub Date: 8/05/98

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