Stocks zigzag to another decline

Dow falls 62 points

recent sell-off now adds up to a `correction'

September 30, 1999|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks turned lower at the close of trading yesterday, breaking out of a tight range as continuing worries about interest rates and the latest warning about corporate earnings rattled the market.

The Dow Jones industrial average finished down 62.05 at 10,213.48, led by Hewlett-Packard Co. The S&P 500 lost 13.83 to 1,268.37, with Avon Products Inc. and Gillette Co. the biggest losers after they issued profit and sales warnings, and the Nasdaq composite index dropped 25.98 to 2,730.27.

Major indexes moved between gains and losses until late in the session as investors debated whether the past several weeks' decline is over.

Advancing issues outnumbered decliners by a 10-to-9 margin on the New York Stock Exchange, where volume totaled about 856.1 million shares.

The Dow fell 11 percent below its Aug. 24 intraday high, exceeding the 10 percent loss that traders call a "correction." The Dow has retreated to April levels amid concern that the Federal Reserve may continue raising interest rates. Central bank policy-makers next meet Tuesday.

The S&P 500 has lost 4 percent this month, after losses in August and July. Should the trend continue, it would be the first time the index has declined for three straight months since August-October 1990.

Elsewhere on the broad market, the Russell 2,000 index, a benchmark of small-cap stocks, rose 3.03 to 421.52; the Wilshire 5,000 index dropped 89.58 to 11,607.90; the American Stock Exchange composite index advanced 7.19 to 780.04; the New York Stock Exchange composite index slid 3.84 to 586.24; and the S&P 400 midcap index added 1.36 to 382.19.

The Sun-Bloomberg Maryland index gained 0.33 to 185.18.

Amazon.com Inc. rose $14.875 to $80.75 and was the most active stock in trading of 79.4 million shares, after the No. 1 Internet retailer said it will let any merchant set up a business on its Web site, giving retailers access to Amazon.com's 12 million customers.

eToys Inc. rose $6.25 to $65.875 after the Internet toy retailer unveiled a feature on its Web site that lets parents and children read about subjects related to the products it sells.

eBay Inc. rose $1 to $140 in trading after the markets closed, after the Nasdaq stock market said the No. 1 online auctioneer will join the Nasdaq 100 index.

E*Trade Group Inc. and other Internet brokers surged in late trading as the companies stepped up advertising and analysts reported increased September trading volume. The No. 2 Internet broker jumped $2.75 to $25.

Among its rivals, National Discount Brokers Group Inc. rose $3.375 to $28.50; Charles Schwab Corp. added $1.25 to $34.50; and Ameritrade Holding Corp. rose $1.4375 to $19.125.

Avon, the world's largest direct seller of cosmetics and beauty products, lost $9.875 to $25.8125 after it said its fourth-quarter profit will fall short of the average analyst estimate of 63 cents a share because of falling currencies in Brazil and Mexico.

HP fell $5.9375 to $89.25, weighing most heavily on the Dow. The computer maker has been one of the strongest stocks in the Dow so far this year, and analysts said investors may be trying to lock in their gains in case the broader market declines further.

Gillette, the world's largest maker of razors and blades, fell $3.5625 to $33.4375. The company said third-quarter sales will fall short of analysts' expectations because of declining demand for its Braun electric shavers and Paper Mate pens.

The warnings from Gillette and Avon hurt several other consumer-products companies. Procter & Gamble fell $3.125 to $95.8125, and Colgate-Palmolive dropped $2.9375 to $46.0625.

International Business Machines Corp. declined $3.25 to $120.25 after Merrill Lynch & Co., the No. 1 broker, removed it from a list of top stock picks. Analyst Steve Milunovich replaced IBM on the Top Ten Tech List with Mercury Interactive Corp., which sells automated software testing products. Mercury Interactive rose $3.75 to $62.50.

Safeco Corp., a property-and-casualty insurer, fell $2.7813 to $26.9063 after warning that its third-quarter earnings would not meet estimates on price competition and claims related to Hurricane Floyd. It expects to earn 5 cents to 15 cents a share, compared with a 49-cent average estimate by analysts.

Oil companies were mostly higher as the price of crude oil futures topped $25 a barrel for the first time since January 1997. Chevron rose 56.25 cents to $88.1875.

USWeb Corp. rose $2.7813 to $33.375. The technology consulting firm said it got $67.5 million from Microsoft Corp. to develop technology for doing business on the Internet.

Pub Date: 9/30/99

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