FINANCIAL MARKETS : STOCKS : Dow Closes Just Shy of the 3,000 Level Again
Wall Street failed to deliver yet again Tuesday as the Dow Jones industrial average closed unchanged at just below the magic 3,000 level, after trading in record territory for much of the day.
The index finished at 2,999.75, unchanged from Monday’s record close. It traded early in the Tuesday session at 3,010.89. The last time the 30-share Dow index wound up the day unchanged was March 14, 1989, at 2,306.25.
In the broader market, prices were hurt by a series of disappointing corporate earnings reports. Declining issues outnumbered advancers by about 4 to 3 in nationwide trading of New York Stock Exchange-listed stocks, with 643 up, 877 down and 519 unchanged. Big Board volume came to 176.79 million shares, up from 149.43 million Monday.
The Dow has been propelled above 3,000 during trading in each of the past three sessions, buoyed by lower interest rates. But each time, profit-taking has knocked the index back down.
Monday and Tuesday, the Dow “missed (3,000) by an eighth of one point on any one of the 30 Dow components,” said William LeFevre, strategist at Advest Group.
A burst of futures-related program buying pushed the Dow up more than 10 points in the last few minutes of trading Tuesday, to just over 3,000. But it couldn’t hold, and the final tally left the index just a hair from the magic mark.
Blue chips had opened slightly stronger, buoyed by better-than-expected earnings by Coca-Cola and Honeywell. Coke rose 1 7/8 to 47 1/4 for the day, and Honeywell 3 5/8 to 110 3/4.
But earnings disappointments crushed other stocks. “You’re either getting zapped with earnings that were good, or you’re getting zapped with earnings that were bad,” said Marshall Acuff, portfolio strategist at Smith Barney Harris Upham & Co.
Example: United Telecommunications plummeted nearly 23%, losing 8 3/4 to 29 1/2, after it reported a 55% drop in second-quarter earnings because of further losses at its long-distance phone subsidiary, US Sprint. The news dragged many phone stocks lower. MCI tumbled 1 5/8 to 38 3/8 and Pacific Telesis lost 1 1/8 to 43 1/8.
Other market highlights:
* Lowe’s Cos. dropped 6 1/8 to 41 1/4 after the building materials retailer was taken off Oppenheimer & Co.’s recommended list, and after Dean Witter cut earnings estimates due to low margins and weak contractor sales. Competing retailer Home Depot fell 1 3/8 to 41 5/8.
* Many growth stocks suffered profit-taking hits, after large recent gains. Circus Circus fell 1 1/8 to 69 1/4, K Swiss lost 1 to 27 1/2 and Waste Management fell 1 1/2 to 44.
* Many high-tech stocks weakened. Unisys lost 3/4 to 12 1/4, IBM fell 1 5/8 to 120 3/4 and Tandem dropped 1 3/4 to 22. But Chatsworth-based disk-drive maker Micropolis rose 1 to 10, continuing to surge on a strong profit report.
* Del Webb rose 1/2 to 9 1/4 after Standard & Poor’s upgraded the firm’s debt.
In Tokyo, stocks closed higher on a spurt of futures-related arbitrage buying in the final moments of trade. The key 225-share Nikkei index closed up 150.55 points at 33,172.28.
In London, the Financial Times 100-share index was up 8.5 points at 2,415.0. In Frankfurt, shares ended little changed, confounding traders, who had expected a rally to be triggered by the fact that the Soviet Union said it would allow a united Germany to be in NATO. The 30-share DAX index ended down 2.86 points at 1,929.00.
A Relatively Rare ‘Unchanged’ Day
The Dow Jones industrial average finished unchanged Tuesday for the first time in more than a year. The last time it wound up the day unchanged was March 14, 1989, at 2,306.25.
