Dow off 63 as stocks take a rocky ride

Several companies issue profit warnings, sparking broad sell-off

Wall Street

September 17, 1999|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks fell in a roller-coaster session caused partly by a broad sell-off on profit warnings from several companies.

The Dow Jones industrial average closed down 63.96 to 10,737.46, led by Hewlett-Packard Co., after trimming a 174-point loss.

The bumpy trading also was attributed to "strategies related to [today's] expiration of options and futures," said Todd Clark, head of listed equity trading at Volpe, Brown, Whelan & Co.

Quintiles Transnational Corp., Eastman Chemical Co., and FDX Corp. slumped after becoming the latest to warn of third-quarter profit shortfalls.

The Nasdaq composite index ended down 7.45 to 2,806.72 after being down 58 points. The Standard & Poor's 500 index eked out a 0.51-point gain to 1,318.48, propped up by Lucent Technologies Inc., which was up $2.25 at $69.25.

Elsewhere on the broad market, the Russell 2,000 index, a benchmark of small-cap stocks, fell 6.08 to 430.25; the Wilshire 5,000 index sank 23.32 to 12,032.54; the American Stock Exchange composite index dropped 6.68 to 790.80; the New York Stock Exchange composite index slid 1.15 to 607.32; and the S&P 400 midcap index lost 3.98 to 397.11.

The Sun-Bloomberg Maryland index of the top 100 Maryland stocks slipped 0.51 to 193.06.

Declining issues outnumbered advancers by an 11-to-5 margin on the New York Stock Exchange, where 723.3 million shares changed hands.

The NYSE completed its regular session even though the approach of Hurricane Floyd prompted Wall Street's biggest firms to let employees leave early. The bond market closed at 1 p.m. New York time, on a recommendation by the Bond Market Association, and New York's commodities markets shut down.

HP, the No. 2 computer maker, fell $4.5625 to $103.9375, accounting for a third of the Dow average's decline, on concern that it may have trouble competing with rival Sun Microsystems Inc. in the market for powerful computers that run Internet sites. HP is making a bigger push into Internet computing with a $100 million advertising campaign and new machines, and investors are looking for results.

Sun rose $2.3125 to $84.6875.

Xerox Corp. fell $4.3125 to $42.75 after the world's No. 1 copier maker said it will realign its sales force for the second time in a year, raising concern the move will again hamper sales.

Quintiles, the No. 1 conductor of clinical trials for drugmakers, tumbled $14.75 to $20 and was the most active stock, with 39.5 million shares traded, after warning that profit will fall short of estimates this year and next after the halt of major drug trials.

FDX, parent of Federal Express, the world's largest express-delivery company, fell $5.4375 to $38.25, and was the biggest loser in the S&P 500 after reporting earnings that missed analysts' estimates by 2 cents a share.

Eastman Chemical fell $2.375 to $43.9375 after it said third-quarter earnings will be "significantly" below estimates.

Comsat Corp. soared $7.50 to $35 after the U.S. Justice Department said it would not block Lockheed Martin Corp.'s $2.5 billion acquisition of the satellite-service provider.

Lockheed, a satellite maker and world's largest defense contractor, has not confirmed that it will complete its tender offer to buy 49 percent of Comsat.

Raytheon Co. fell $7.3125 to $53.625 after the defense contractor said its earnings would miss analysts' projections for the third quarter and for the year.

American Home Products Corp. rose $3.50 to $46.75 amid reports that the company is nearing a $3 billion settlement of lawsuits over a diet drug linked to health problems.

Overseas, Germany's DAX index fell 1.5 percent, Britain's FTSE 100 lost 0.9 percent, and France's CAC-40 closed 0.5 percent lower. Japan's Nikkei stock average plunged 2.7 percent as investors feared the end of the nation's economic recovery.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.