Dow falls 93 points, ending at day's low Worries about Asia are joined by jitters about Russia

Wall Street

August 14, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks fell yesterday on concern that Asia's stumbling economies will lead to lower U.S. company profits in coming quarters and that Russia's cash crunch could reverberate through U.S. banks and financial firms.

DuPont Co. and Boeing Co., which export to Asia, and J. P. Morgan & Co., Citicorp and Chase Manhattan Corp. -- all banks with overseas finance businesses -- led the decline.

The Dow Jones industrial average fell 93.46 to 8,459.50, closing at its lowest level of the day. The Standard & Poor's 500 index dropped 9.31 to 1,074.91, and the Nasdaq composite index, dominated by large computer-related companies, declined 22.99 to 1,802.54.

Among other broad indexes, the Russell 2,000 index of small capitalization stocks slid 4.72 to 403.83; the Wilshire 5,000 index fell 84.49 to 10,003.82; the American Stock Exchange composite index lost 1.02 to 667.78; and the S&P 400 midcap index slipped 3.34 to 331.74.

Almost two stocks fell for every one that rose on the New York Stock Exchange. On all U.S. exchanges, 72 stocks reached 52-week highs and 544 set lows. About 658 million shares changed hands on the NYSE, less than Thursday's 709 million.

The two largest U.S. banks declined. Citicorp fell $7 to $140 and Chase lost $2.0625 to $64.125. American Express Co., which said last week that plunging Asian economies would slow revenue growth in the second half, fell $3.375 to $95.25. J. P. Morgan lost $1.25 to $117.25.

DuPont fell $5.50 to $55 after the largest U.S. chemicals company warned that third-quarter earnings would be "in the low range" of estimates and below last year's levels. DuPont, which owns oil company Conoco Inc., cited lower prices for oil and the impact of the Asian economic crisis, particularly on its polyester business.

Boeing, the world's largest airplane maker, dropped $1.6875 to $37.1875. It also depends on a growing world economy to boost sales, and it announced yesterday that it expects to make more job cuts.

Merck & Co. gained $1.50 to $126.75, and Pharmacia & Upjohn Inc. rose 50 cents to $45. American depositary receipts of Glaxo Wellcome PLC rose 93.75 cents to $58.9375.

Microsoft Corp. fell $1.125 to $103.9375, and Cisco Systems Inc. lost $1.875 to $96.6875.

Dillard's Inc. rose 68.75 cents to $35.50. The department store retailer said earnings for the second quarter ended Aug. 1 rose to 45 cents a diluted share from 40 cents a year earlier, beating estimates of 42 cents a diluted share. May Department Stores Co., the parent of Hecht Co., rose 37.5 cents to $64.

Nordstrom Inc. rose $2.9063 to $35.0938 after the seventh-largest U.S. department store chain said earnings for the second quarter rose 18 percent and beat expectations as the company clamped down on inventory levels and cut costs.

Kmart Corp. and Gap Inc. fell, even though the retailers beat earnings forecasts. Both stocks have surged this year and rose Thursday in anticipation of strong reports. Kmart fell 87.5 cents to $17.8125. The No. 2 U.S. discount retailer said it earned 19 cents a share in its fiscal second quarter, beating the 17 cent average forecast. Gap dropped $3.0625 to $63.50. The No. 3 U.S. clothing chain said fiscal second-quarter profit almost doubled as clever ads and higher consumer confidence lifted sales of T-shirts, jeans and khakis at its Gap and Old Navy stores.

Oil shares gained with the price of crude. Exxon Corp. rose 50 cents to $67.5625 and Mobil Corp. gained $2.25 to $69. Oil futures rose for the first time in four days on the New York Mercantile Exchange, gaining 4 percent to $13.21 a barrel, after Platt's Global Alert said Saudi Arabia, the world's biggest producer, is cutting deliveries as part of a producer plan to reduce excess supplies to boost prices.

The rise in oil prices hurt airline stocks. UAL Corp., parent of United Airlines, fell $3.875 to $65.625 and AMR Corp., which owns American Airlines, lost $2.50 to $60.3125.

United HealthCare Corp. dropped $2.8125 to $32.0625 after executives briefed analysts on the company's prospects in the wake of the collapse of its planned acquisition of Humana. United Health executives said medical costs could increase faster next year, analysts said.

Pub Date: 8/14/98

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