Stocks stumble on profit concerns Dow industrials drop 79 points, to 8,523

Nasdaq tumbles 1.67%

August 27, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks fell yesterday, as a plunge in Russian markets deepened concern that slumping economies around the world are cutting into corporate profits.

United Technologies Corp., J. P. Morgan & Co., Chevron Corp. and other companies with international businesses led the drop. Banks fell on concern that a Russian debt restructuring unveiled yesterday will result in huge losses on overseas bond holdings.

The Dow Jones industrial average closed down 79.30 to 8,523.35 after paring a 135-point loss. The Standard & Poor's 500 index fell 8.66 to 1,084.19 and the Nasdaq composite index dropped 30.04, or 1.67 percent, to 1,768.13.

Among other broad indexes, the Russell 2,000 index of small capitalization stocks lost 9.34 to 380.42; the Wilshire 5,000 index dropped 116.36 to 9,948.06; the American Stock Exchange composite index fell 13.03 to 633.83; and the S&P 400 midcap index slid 6.64 to 318.78.

The Sun-Bloomberg Maryland index, which tracks the top 100 Maryland stocks by market valuation, dropped 3.53 to 193.86.

Three stocks fell for every one that rose on the New York Stock Exchange. More than 674 million shares changed hands on the HTC NYSE, above the daily average of 638 million for the past three months.

Stocks climbed back from their lows after Stanley Druckenmiller, chief investment officer of George Soros' $22 billion group of funds, told CNBC that the U.S. stock market is the most attractive in the world, and predicted that money will pour into U.S. assets because of the turmoil in other countries' markets.

Just 55 stocks reached 52-week highs on U.S. exchanges, while 1,403 fell to lows. Just 12 of the S&P 500's 89 industry groups rose. The Russell 2000 is 23 percent below its April record. Investors typically define a bear market as a decline of 20 percent or more.

United Technologies, which gets more than 40 percent of its sales outside the United States, fell $3.1875 to $82.875, leading the Dow's decline.

Applied Materials Inc. lost $1.875 to $29.5625. The world's largest maker of semiconductor-manufacturing equipment said late Tuesday that it will cut 2,000 jobs, or 15 percent of its work force, in the face of slumping sales to computer-chip makers in Asia and elsewhere, and will take an unspecified charge for the firings that will result in a fourth-quarter loss.

Harnischfeger Industries Inc. plunged $3.375 to $16.875 after the mining and paper-making equipment company reported a bigger-than-expected quarterly loss because of weak demand stemming from a paper glut.

Consumer stocks gained. Bristol-Myers Squibb Co. rose $4.0625 to $112.625, and supermarket operator Albertson's Inc. gained $1.3125 to $53.6875. Wal-Mart Stores Inc. added 56.25 cents to a record $69.0625.

Dell Computer Corp. jumped $4.625 to a record $128.625.

J. P. Morgan, one of the U.S. banks doing business in Russia and other emerging markets, fell $2.9375 to $117.9375. Citicorp lost $2.25 to $133.875, and Bankers Trust Corp. dropped $4.75 to $92.125. Travelers Group Inc., which is merging with Citicorp, fell 50 cents to $54.625.

Oil stocks slumped after Saudi Arabia, Venezuela and Mexico, among the largest oil exporters, canceled a Friday meeting to discuss tumbling prices. Amoco Corp. fell $1 to $49 and Chevron Corp. dropped $1.6875 to $76.50.

American depositary receipts of Russian stocks fell. Vimpel-Communications, which provides cellular phone service in Russia, dropped $4.5625 to $15.4375 and oil producer AO Tatneft fell 43.75 cents to $3.5625.

Global TeleSystems Group Inc., a U.S. company that provides telecommunications service in Russia and other Eastern European countries, tumbled $6.875 to $33.625.

Pub Date: 8/27/98

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