Stocks stumble, but Dell leaps 8 3/8 Dow industrials fall 21 points, to 8,693

airlines slump

August 20, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks fell as declines in companies exposed to Asia's slump, such as semiconductor-makers and banks, offset gains in computer manufacturers sparked by Dell Computer Corp.'s earnings.

The Dow Jones industrial average fell 21.37 to 8,693.28, led by J. P. Morgan & Co. The Standard & Poor's 500 index fell 3.14 to 1,098.06, and the Nasdaq composite index fell 12.43 to 1,842.69.

Among other broad indexes, the Russell 2,000 index of small stocks lost 5.45 to 405.84; the Wilshire 5,000 index fell 37.97 to 10,182.52; the American Stock Exchange composite index skidded 4.43 to 665.59; and the S&P 400 midcap index slipped 2.69 to 335.77.

The Sun-Bloomberg Maryland index, which tracks the top 100 Maryland stocks by market valuation, fell .84 to 205.94.

Three stocks fell for every two that rose on the New York Exchange, where volume totaled 631 million shares.

The yield on the 30-year U.S. Treasury bond was unchanged at 5.55 percent.

Airline stocks slumped late in the day after Northwest Airlines Corp. rescinded its 4 percent leisure fare increase on U.S. flights. Northwest fell $1.50 to $29; UAL Corp. fell $3 to $71.0625; and Delta Air Lines Inc. dropped $3.6875 to $121.25.

Dell soared $8.375 to $117.9375 after the No. 1 direct seller of personal computers reported fiscal second-quarter earnings that beat expectations and said it will split its stock 2-for-1. The company's earnings rose 62 percent in the quarter, and analysts expect an even better second half.

Dell's results initially helped fuel a rally in computer-related shares, though by the end of the day most stocks in the industry were lower.

The impact of Asia's recession showed up in disappointing earnings news from LSI Logic Corp., Analog Devices Inc. and Tektronix Inc.

LSI Logic, the largest maker of computer chips for networking equipment, warned that third-quarter earnings would be below analyst forecasts because of lower-than-expected orders. LSI dropped $2.625 to $15.625.

Analog Devices slumped $2.75 to $21.50, after the world's No. 3 maker of chips for appliances, cellular phones and testing equipment said fiscal third-quarter profit plunged 50 percent.

Tektronix plunged $7.9375 to $23, and was the biggest decliner in the S&P 500. The world's largest maker of electronic-measurement devices said fiscal first-quarter profit could dive as much as 87 percent below analyst estimates because of lower sales in the United States and Asia.

Intel Corp. fell $1.875 to $89.5625.

National Semiconductor Corp. fell $1.375 to $12.8125. The company said it will post larger-than-expected losses in the first and second quarters of this fiscal year because of weak demand.

J. P. Morgan fell $1.125 to $126.50; BankAmerica Corp. lost $2.4375 to $81.8125; and Citicorp lost $2.9375 to $144.

Fluor Corp. jumped $3.875 to $44.50 after the engineering and construction company said earnings for its fiscal third quarter beat analysts' estimates.

Among oil-service stocks, Ensco International Inc. rose $1.25 to $13.5625; Schlumberger Ltd. rose $1.5625 to $55.4375; and Apache Corp. gained $1.25 to $27.0625.

Metro-Goldwyn Mayer Inc. rose $2.875 to $18.1875 after Kirk Kerkorian's Tracinda Corp. agreed to buy Seven Network Ltd.'s stake in the struggling movie and television studio for $24 a share.

Tricon Global Restaurants Inc. surged $4.50 to $37 after the second-largest U.S. restaurant company said fiscal third-quarter earnings per share will be up a higher-than-expected 50 percent on improved results at its Taco Bell, KFC and Pizza Hut stores.

Netscape Communications Corp., the No. 1 maker of Internet browser software, fell $1.25 to $30.875 after warning analysts not to raise their fiscal fourth-quarter earnings estimates.

Envoy Corp., which processes transactions for health-care companies, plunged $3.6875 to $22.8125 after the company said securities regulators are questioning some research write-offs in several acquisitions.

American Home Products Corp. gained 81.25 cents to $51.9375 after Merrill Lynch & Co. analyst Steven C. Tighe raised his rating on the stock to near-term "buy" from near-term "accumulate."

Pub Date: 8/20/98

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