Stocks slip on fears of global drag on earnings Kodak's 13% share drop leads Dow's 63-point loss

Nasdaq index falls 36

Wall Street

October 14, 1998|By BLOOMBERG NEWS

NEW YORK -- Stocks fell for the first time in three days on concern that slower growth worldwide may continue to crimp profits. Eastman Kodak Co. led the Dow Jones industrial average lower after a larger-than-expected drop in sales.

The Dow average fell 63.33 points, or 0.8 percent, to 7938.14 yesterday. The Standard & Poor's 500 Index fell 2.91, or 0.3 percent, to 994.80. The Nasdaq Composite Index fell 36.63, or 2.4 percent, to 1509.45, reversing a two-day rally.

Analysts expect companies in the S&P 500 to report that earnings declined an average 3.2 percent from a year ago as slowing economies in Asia and Latin America drag on U.S. growth, according to First Call Corp. At the beginning of the year, analysts predicted growth of 15.3 percent.

Kodak fell $11.1875, or 13 percent, to $72.375, its biggest one-day decline since the October 1987 crash. The world's largest photography company said that third-quarter sales in emerging markets fell 17 percent and were down 10 percent overall.

Computer-related shares declined, reversing a two-day rally that boosted the Nasdaq by 9 percent. Compaq fell $2.4375, to $24.875. Dell dropped $3.0625, to $53. Microsoft lost $3.3125, to $96.4375.

Intel Corp. fell $1.875, to $83.5625. The world's largest maker of computer chips said after the market closed that it earned 89 cents a share in the third quarter. Analysts expected profit of 80 cents a share, according to First Call. In post-market trading, Intel declined another $2.0625, to $81.50.

Three stocks fell on the New York Stock Exchange for every two that rose. In U.S. trading, just 24 stocks rose to new highs for the past 52 weeks, while 665 declined to new lows. About 725 million shares changed hands, in line with the average daily volume of 748 million.

Among other broad market indexes, the Russell 2000 Index of small-capitalization stocks fell 5.29, to 320.33; the Wilshire 5,000 index dropped 52.94, to 8960.41; the American Stock Exchange composite index fell 3.15, to 577.86; and the S&P 400 index lost 3.37, to 287.14.

The Sun-Bloomberg Maryland index, which tracks the top 100 stocks in Maryland by market valuation, fell 2.08, to 166.85.

Overseas, Tokyo's Nikkei stock average fell 2.3 percent, Frankfurt's DAX index rose 1.2 percent and London's FT-SE 100 fell 0.9 percent.

Monsanto Co. fell $13.375, or 27 percent, to $37, the worst drop on the Standard & Poor's index, and American Home Products Corp. fell $5, or 10 percent, to $45, after the two pharmaceutical companies canceled their $35 billion merger. Pfizer Inc. fell $5.25, to $87.75. The New York company behind the impotence drug Viagra reported third-quarter earnings of 51 cents, 6 cents below analysts' average forecast. Merck & Co. lost $3.125, to $128, and Eli Lilly & Co. fell $1.25, to $72.50.

Airlines fell after Kevin Murphy, an analyst with Morgan Stanley Dean Witter & Co. reduced his ratings on several U.S. carriers, including AMR Corp., parent of American Airlines Inc.

AMR Corp. slipped $3.75, to $48. UAL Corp., parent of United Airlines, fell $4.25, to $59.

Pub Date: 10/14/98

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