Rate-cut rally runs out of gas Dow industrials drop 24 points, to 8,986

Nasdaq climbs 16

November 18, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks were mixed yesterday, after a rally sparked by a Federal Reserve interest rate cut fizzled. Hewlett-Packard Co. declined after warning of lower earnings, offsetting a rally in brokerages such as Merrill Lynch & Co.

The Dow Jones industrial average closed 24.97 lower at 8,986.28, with Hewlett-Packard accounting for all of the loss. The Dow had jumped 91 points after the Fed announcement, rebounding from a 82-point drop.

The Standard & Poor's 500 index rose 3.45, to 1,139.32, and the Nasdaq composite index gained 16.84, to 1,878.52.

Elsewhere on the broad market, the Russell 2,000 index of small-capitalization stocks slid 0.99, to 389.43; the Wilshire 5,000 index added 31.50, to 10,415.39; the American Stock Exchange composite index slipped 0.83, to 666.89; and the S&P 400 midcap index gained 2.03, to 348.77.

The Sun-Bloomberg Maryland index of the top 100 Maryland stocks lost 0.46, to 190.28.

Advancers and decliners were almost evenly matched on the New York Stock Exchange. About 699 million shares traded on the Big Board, below the three-month daily average of 767 million.

Merrill Lynch gained $4.3125, to $67.8125; BankAmerica Corp. rose $1.3125, to $61.0625; and Chase Manhattan Corp. climbed $3.4375, to $61.1875.

Hewlett-Packard, the No. 3 computer maker, dropped $6, to $60.125, after warning that its first-quarter earnings may fall and fiscal 1999 sales may not meet forecasts as it struggles with increased competition and weakness in Asia and Latin America.

DaimlerChrysler AG, formed from the merger of Daimler-Benz AG and Chrysler Corp., fell 43.75 cents, to $83.875, in its first day of trading on the New York Stock Exchange, where the event was marked with honking horns and flashing headlights. On Monday, the "when-issued" shares rose $4.8125, or 6 percent.

Amazon.com Inc. soared $22.25, to $148.50, yesterday, after the No. 1 online bookseller said it opened an online video store that will compete with Hollywood Entertainment Corp.'s Reel.com World Wide Web site. Hollywood Entertainment rose 6.25 cents, to $18.6875.

Ceridian Corp. rose $3.50, to $58.875. The information-services company said it purchased closely held Work/Family Directions Inc.'s LifeWorks unit to add to its workplace efficiency products.

Envoy Corp. jumped $7.50, to $39.9375. The electronic processor of health care claims cut its losses for the years 1996 bTC and 1997 to reflect accounting changes that resulted in a decrease in the purchase price allocated to acquired in-process technology.

K-Tel International Inc. sank $5.625, to $12. The seller of music, videos and other entertainment was notified by Nasdaq that it fails to meet the tangible net asset requirement for trading on the national market and faces delisting.

Pub Date: 11/18/98

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