Stocks drop in worst decline in month

Computer shares fizzle, snap Nasdaq's 9% rise

Dow falls 145.21 points

January 13, 1999|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks suffered their worst decline in a month yesterday as a rally in Internet shares fizzled, snapping this year's 9 percent gain in the Nasdaq composite index.

The Nasdaq index fell 63.84, or 2.7 percent, to 2,320.75, its worst decline since mid-December. TheStreet.com Internet index, which tripled in the past three months, lost 7.8 percent.

The Dow Jones industrial average dropped 145.21, or 1.5 percent, to 9,474.68, and the Standard & Poor's 500 index slid 24.37, or 1.9 percent, to 1,239.51.

Microsoft Corp., Intel Corp., Lucent Technologies Inc. and BankAmerica Corp. were among the biggest losers in the S&P 500, and all but five of the 30 members of the Dow average fell.

Elsewhere on the broad market, the Russell 2,000 index of small-cap stocks lost 5.77, to 427.36; the Wilshire 5,000 index skidded 203.07, to 11,440.46; the American Stock Exchange composite index slid 7.67, to 699.65; and the S&P 400 midcap index fell 3.79, to 384.35.

The Sun-Bloomberg Maryland index of the top 100 Maryland stocks slipped 0.64, to 196.90.

Seven stocks fell for every three that rose on the New York Stock Exchange, as 800 million shares changed hands, compared with the three-month daily average of 716 million.

After the market closed, Intel, which fell $4.1875, to $135.5625, reported an 18 percent increase in fourth-quarter earnings. Yahoo! Inc., also down for most of the day, reported a profit of 21 cents a share for the period, beating analysts' estimates, and announced a 2-for-1 stock split.

Amazon.com Inc. fell $21.25, to $163.375, yesterday. The Internet book retailer is still up about 53 percent this year.

Lycos Inc., the No. 3 Internet search directory, fell $26.50, to $104.50, leaving it with an 88 percent gain this year.

Cisco Systems Inc., the top computer-network equipment maker, fell $6.5625, to $98.125. It's still up 5.7 percent from Dec. 31.

Broadcom Corp. fell $19.25, to $138, after Morgan Stanley Dean Witter & Co. analyst Mark Edelstone lowered his rating of the No. 1 maker of cable-modem computer chips. He warned in a report that its recent surge exceeded its profit potential.

E Trade Group Inc. was an exception among Internet stocks. The No. 2 online brokerage jumped $12.4375, to $100.9375, on its plans to form an investment bank that would help companies raise capital by selling securities to investors over the Internet. On Monday, E Trade reported a 63 percent rise in revenue.

Ameritrade Holding Corp., the sixth-largest online brokerage, rose $16, to $59, yesterday.

Knight/Trimark Group Inc., the biggest trader of Nasdaq securities, rose $15.625, to $54.125, after saying it executed a record 395,000 trades Friday.

Alcoa Inc. lost $2.9375, to $85.25, after Morgan Stanley analyst R. Wayne Atwell downgraded it to "under-perform" from "outperform." The shares soared 15 percent since Friday when Alcoa announced better-than-expected fourth-quarter profit, raised its dividend 50 percent and split its stock.

BankAmerica sank $3, to $66.9375; Bank One Corp. lost $2.4375, to $53.875; BankBoston Corp. fell $1.50, to $37.6875; Chase Manhattan Corp. skidded $2.375, to $73.875; First Union Corp. slipped $1.5625, to $62.50; and U.S. Bancorp slid $1.0625, to $34.9375.

Walt Disney Co., the world's second-largest media company, rose $2.75, to $38, after it and Infoseek Inc., an Internet directory, unveiled their Go Network Web site, aimed at attracting more consumers and revenue online.

Eastman Kodak Co. rose $4.375, to $79.625, after the Wall Street Journal reported that U.S. sales of 35-millimeter film rolls increased by about 18 percent in the four weeks that ended Dec. 26 from the previous holiday season.

Drug shares fell for the fourth day. Pfizer Inc. dropped $4.0625, to $113.6875; Merck & Co. lost $2.75, to $147.9375; and Schering-Plough Corp. declined $1.50, to $51.25.

Pub Date: 1/13/99

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