Dow Slips 3 as Technology Sector Sags
Wall Street’s blue chip stocks crept lower Wednesday as weakness in the technology sector highlighted fears of a recession in a market already worried about higher interest rates.
The Dow Jones average of 30 industrials slipped 3.04 to 2,263.21.
Declining issues outnumbered advances by about 4 to 3 in nationwide trading of New York Stock Exchange-listed stocks.
Volume on the floor of the Big Board came to 146.57 million shares, against 142.01 million in the previous session.
The Commerce Department reported that new factory orders for durable goods dropped 3.6% in February, surprising analysts who had expected an increase.
The news was interpreted as a fresh signal that the economy was beginning to lose the momentum that has created upward pressure on inflation and interest rates in recent months.
But analysts said many traders remained unconvinced that inflation was ready to abate after back-to-back increases of a full percentage point in the producer price index of finished goods in January and February.
Also, some investors apparently are beginning to worry about the implications of slower growth for corporate profits.
Digital Equipment, the most active NYSE issue, tumbled 10 5/8 to 96 3/8 as several analysts scaled back their earnings estimates for the company.
International Business Machines, which has been under pressure since it issued a downbeat first-quarter earnings projection last week, fell 7/8 to 109 1/4.
Elsewhere in the technology sector, Hewlett-Packard dropped 1 3/4 to 52; Compaq Computer fell 1 1/4 to 68 1/8, and Microsoft, traded in the over-the-counter market, dipped 7/8 to 49.
Comprehensive Care fell 1 3/8 to 9 3/4. The company reported lower quarterly earnings and omitted its dividend.
Gerber Products Inc. rose 1 7/8 to 66 3/4. The company is expected to report higher earnings for the fiscal year ending March 31.
Honeywell Inc. shares also were up, gaining 1/2 to 64 3/8. Two Wall Street analysts reiterated buy recommendations, citing strong orders, good cash flow and an attractive share price.
Communications Satellite Corp. rose 1 1/2 to 28. Comsat attributed the rise to news that rival Spectradyne Inc. is being bought out for $635 million.
National Patent Development, traded on the American Stock Exchange, slumped 7/8 to 6 1/4. The company suspended its dividend.
The Wilshire index of 5,000 equities closed at 2,873.261, down 6.192, or 0.22%, from Tuesday’s close.
The NYSE’s composite index of all its listed common stocks dipped 0.39 to 163.41.
Standard & Poor’s industrial index fell 1.31 to 334.54, and S&P;'s 500-stock composite index was down 0.84 at 290.49.
The NASDAQ composite index for the over-the-counter market lost 1.20 to 400.57. At the Amex, the market value index closed at 325.88, down 0.61.
Tokyo stocks closed lower Wednesday after investors, jittery about inflation and interest rates both here and abroad, sold stocks and took to the sidelines. The Nikkei share index fell 211.56 points, or 0.67%, to close at 31,443.24.
Worries about worldwide interest rates also pushed share prices sharply lower on the London Stock Exchange. The Financial Times 100-share index fell 23.6 points, or 1.1%, to 2,048.6.