Dow closes week with 130-point tumble

Investors continue to be concerned that Fed will raise rates

June 12, 1999|By BLOOMBERG NEWS

NEW YORK -- The Dow Jones industrial average fell for a fourth straight day after economic reports left investors concerned that the Federal Reserve will raise interest rates later this month. Internet shares such as CMGI Inc. and eBay Inc. slumped.

Retail sales rose last month at the strongest pace in three months and producer prices accelerated. Consumer confidence rose more than expected.

The Dow average fell 130.76, or 1.2 percent, to 10,490.51, extending its loss for the past four days to 456 points. The Nasdaq composite index dropped 36.74, or 1.5 percent, to 2,447.88, pulled lower by Microsoft Corp. and CMGI. The Standard & Poor's 500 index fell 9.18, or 0.7 percent, to 1,293.64.

Elsewhere on the broad market, the Russell 2,000 index, a benchmark of small-cap stocks, fell 4.25 to 438.01; the Wilshire 5,000 index slumped 96.74 to 11,885.27; the American Stock Exchange composite index slid 2.43 to 765.82; and the S&P 400 midcap index lost 2.08 to 3989.83

The Sun-Bloomberg Maryland index of the top 100 Maryland stocks slipped 0.89 to 189.08.

Three stocks fell for every two that rose on the New York Stock Exchange, where 698.2 million shares traded.

For the week, the Dow average lost 2.9 percent, its biggest weekly loss since a 3.1 percent drop for the week that ended Jan. 15. The S&P 500 fell 2.6 percent, and the Nasdaq dropped 1.2 percent.

The New York Stock Exchange imposed its "downtick" rule 20 minutes before the close as the Dow briefly fell 190 points. The rule is meant to slow market declines by forcing traders to wait until shares rise before executing orders involving groups of stocks and equity index futures.

Dow components were lower across the board, with Hewlett-Packard Co., down $4.625 to $88.375, posting the sharpest decline.

CMGI fell $11.75 to $89.75 after the Internet venture fund said it posted a fiscal third-quarter loss as its operating expenses almost doubled.

eBay, the Internet's leading auctioneer, fell $16.8125 to $165.875, saying a computer-related problem forced it to suspend its auction business Thursday night.

America Online Inc. fell $5.8125 to $99.6875; Charles Schwab Corp. lost $4 to $94.25; and Inc. sank $9.9375 to $106. Microsoft fell $1.75 to $78.125.

The yield on the 30-year Treasury bond, which reflects inflation expectations, rose 10 basis points to 6.16 percent. On June 4, the yield was 5.96 percent. For bond prices, which move opposite to the yield, it was the worst week in 3 1/2 months.

MGM Grand Inc. rose $3.375 to $46.50. The casino company controlled by billionaire Kirk Kerkorian is expected to offer $50 a share to buy back up to 6 million shares, or about 10 percent of its outstanding stock. The offer will complete a 12 million-share repurchase program started a year ago.

Harbinger Corp. rose $2.3125 to $12.75. The supplier of electronic-commerce software said second-quarter earnings will meet or exceed the 7-cents-a-share average estimate of analysts polled by First Call Corp.

Overseas, Japan's Nikkei stock average rose 0.56 percent. European markets were higher, as Germany's DAX index rose 1.8 percent, Britain's FT-SE 100 gained 1.3 percent, and France's CAC-40 closed 0.1 percent higher.

Pub Date: 6/12/99

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