Stocks lackluster after rate cut Dow loses 28 points as some traders boo Fed's mild easing

September 30, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. shares were mixed yesterday, as a quarter-point interest-rate cut by the Federal Reserve left investors hungry for more and a key index of consumer confidence showed an unexpectedly steep decline this month.

On the floor of the New York Stock Exchange, some traders booed the announcement on the Fed's action; the Dow Jones industrial average had gained 211 points in four sessions, spurred by Greenspan's speech last Wednesday, in which he hinted that a rate cut was forthcoming.

Yesterday, the Dow fell 28.32, to 8,080.52. Goodyear Tire & Rubber Co. fell $3.75, to $52, accounting for half that loss, after North America's largest tire maker warned that third-quarter earnings will fall short of expectations because of unfavorable conditions in Asia and Latin America.

The Standard & Poor's 500 index finished up 0.32, at 1,049.01, and the Nasdaq composite index fell 5.17, to 1,734.05.

Other indexes down

Among other broad indexes, the Russell 2,000 index of small-capitalization stocks lost 2.21, to 365.80; the Wilshire 5,000 index slid 3.55, to 9,600.39; the American Stock Exchange composite index fell 11.77, to 628.35; the NYSE composite index slipped 0.26, to 518.29; and the S&P 400 midcap index skidded 1.84, to 313.00.

Advancing stocks edged decliners 1,523 to 1,521 on the NYSE. About 743 million shares changed hands, above the three-month average of 711 million.

Gillette Co. fell $2.375, to $37.625. The world's biggest razor-blade maker said after the close of trading Monday that its third-quarter profit will drop 20 percent on sluggish overseas sales and unexpectedly low demand for its newest razor. The shortfall shattered a string of eight years of rising quarterly profits.

Gillette also said it will cut 4,700 jobs, or 11 percent of its work force, and close dozens of plants and offices to slash costs.

International Flavors and Fragrances fell 43.75 cents, to $32.8125, after the company, whose products are used in everything from candy to cosmetics, said its third-quarter profit will fall short of analysts' forecasts because of a strong dollar and slowdowns in Asia, Russia and Latin America.

Many 52-week lows

In composite trading, 456 companies fell to 52-week lows, while 103 rose to highs for the period.

Stocks that will be included in the Standard & Poor's 500 after the close of trading today gained. Union Planters Corp. rose $3.75, to $51.125; BMC Software Inc. added $2.625, to $59.0625; PeopleSoft Inc. climbed $2.1875, to $33.50; and AES Corp. increased $4.75, to $38.25.

ESC Medical Systems Ltd. tumbled $8.125, to $6.50, after the medical-device maker said third-quarter earnings will be about half the forecast of 50 cents a share because of weak sales in Europe and South America. The stock has lost 71 percent of its value in four sessions.

AMR Corp. fell $3.25, to $59.0625; Alaska Airgroup Inc. slid $3.0625, to $35.25; and CNF Transportation Inc. slipped $2.0375, to $26.8125.

Micron Technology Inc., the world's No. 2 maker of computer-memory chips, fell $2.25, to $31.625, after saying it lost money for a third consecutive quarter because of slumping prices.

Micron Electronics Inc., the No. 3 direct seller of personal computers, rose $1.1875, to $18.125. It reported better-than-expected fiscal fourth-quarter earnings on strong sales of its PCs.

U.S. Home Corp., the sixth largest U.S. homebuilder, declined $2.875, to $29.3125, after warning that third-quarter earnings will fall short of expectations because of construction delays.

Viacom Inc.'s Class B shares fell $6.875, to $56.75, on concern that higher costs at its Blockbuster Entertainment video chain and MTV Networks cable TV unit will hurt third-quarter cash flow.

Pub Date: 9/30/98

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