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STOCKS : Dow Falls 16.58 Amid Worries Over Earnings

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From Times Wire Services

Blue chip stocks closed lower Thursday amid worries over the outlook for corporate earnings, but the broader market managed a slight rise as investors picked up bargain-priced issues.

The Dow Jones industrial average fell 16.58 to 2,855.45. Big Board volume was a heavy 199.83 million shares, up from 196.81 million Wednesday.

In the broader market, advancing issues held a slight edge on declines in nationwide trading of New York Stock Exchange-listed stocks, with 818 up, 749 down and 490 unchanged.

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The Dow index of 30 leading companies had been up more than 20 before it retreated, failing to extend Wednesday’s slender rebound.

“We don’t have the same kind of strength we saw yesterday,” said Jim Schroeder, market analyst at MMS International.

Worries about first-quarter corporate earnings--after IBM Corp.’s bearish earnings forecast Tuesday--continued to weigh on stocks.

Traders said the market was unnerved in the afternoon by speculation that earnings of oil services giant Schlumberger Ltd. would fall short of expectations.

A Schlumberger spokeswoman said the company had met with analysts Thursday but would not elaborate. The company’s stock tumbled, closing down 4 1/8 at 57 1/4. Halliburton, another oil services company, lost 2 1/8 to 47 7/8.

IBM, meanwhile, added to its losses after its 10% plunge Tuesday and a smaller loss Wednesday, ending down 2 1/4 at 111 7/8.

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Investors are also worried that the Federal Reserve, faced with troubling inflation data for the past two months, will be reluctant to lower interest rates further to ensure that the economy rebounds soon.

“There was a slow deterioration in the market. You could see it in fewer advancing versus declining issues and a dramatic change in the OTC market,” said Thom Czech, chairman of the investment committee at Blunt, Ellis & Loewi.

The NASDAQ over-the-counter index closed down 1.49 at 464.60.

Medical, food and consumer stocks--which are less vulnerable to weakness in the economy--managed to rise.

Among the market highlights:

* Philip Morris was up 1/2 to 69, having reached a new 52-week high earlier in the session of 70 1/2. Ralston Purina rose 3/4 to 56 1/2.

* C. R. Bard, a medical supplier, rose 1 5/8 to 22 7/8.

* Shares of Sanifill lost 4 to close at 24 3/8. Alex. Brown & Sons lowered its rating for the company after the waste-disposal firm said first-quarter earnings could be down 10% to 20% from a year ago.

* Shares of Russell Corp. slipped 1 3/4 to 24. The athletic apparel maker said late Wednesday it anticipates that first-quarter earnings will fall below analysts’ estimates.

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* Software Publishing plunged 6 7/8 to 18 after the company said Wednesday that it expects break-even second-quarter earnings or profits of 5 cents a share, below 39 cents a year earlier.

Overseas, share prices jumped on the London Stock Exchange, propelled higher by expectations of cuts in Britain’s 13% base lending rate. The Financial Times 100-share average finished up 33.6, or 1.4%, at 2,474.8.

Early gains for German shares were reversed in the course of the session, but the losses were braked when the 30-share DAX average neared an important chart support level at 1,520. The average ended 1.67 points higher at 1,519.59.

The Tokyo market was closed for a national holiday and will reopen today.

Credit

Bond prices rose slightly after a report of higher postwar unemployment, but the move was muted by traders’ uncertainty over the economy’s direction.

The Treasury’s 30-year issue rose about 1/8 point or about $1.25 cents per $1,000 in face amount. Its yield eased to 8.33% from 8.34% late Wednesday.

The Labor Department reported that initial claims for state unemployment insurance rose to 519,000 in the week ended March 9, up from 474,000 the previous week. It was the highest level in eight years.

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The report also indicated that the economy didn’t receive the momentum many predicted upon the conclusion of the Persian Gulf War.

The federal funds rate, the interest on overnight loans between banks, was quoted at 6.188%, down from 6.50% late Wednesday.

Currency

Joint action by major central banks sapped the dollar’s strength, generating a steady decline that was interrupted briefly by a rumor that Germany’s embattled monetary chief was prepared to resign.

Currency traders said at least eight European central banks sold $500 million to $1 billion in dollars in an effort to stem the currency’s advance.

The dollar has risen about 14% since the end of the Gulf War on confidence in the U.S. economy’s potential to rebound. That has raised fears that the currency’s rise could ultimately have a negative economic impact.

In addition to the concerted intervention, the dollar was hurt by the Labor Department’s report on unemployment claims.

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Hillel Waxman, vice president in foreign exchange at Bank Leumi Trust Co. of New York, said the jobless claims report temporarily stole some of the postwar euphoria that buoyed the dollar this past month.

The dollar was bumped briefly higher in the morning by rumors, later proven untrue, that German Bundesbank President Karl Otto Poehl planned to resign. The monetary chief has come under fire from German officials after remarking earlier this week that Germany’s economic reunion was a failure.

“It was just a rumor, but it was good enough to move the dollar up to the high levels of the day,” said Lorenzo Troni, vice president of foreign exchange at Paine Webber International Inc. in New York.

The dollar ended at 1.6315 German marks, compared to 1.6425 Wednesday, and at 136.73 Japanese yen, compared to 138.30 Wednesday in New York trading. The British pound also rose in New York, fetching $1.7995 by the end of the day, more expensive than late Wednesday’s $1.7855.

Other late dollar rates in New York, compared with late Wednesday, included 1.4055 Swiss francs, down from 1.4150; 5.5555 French francs, down from 5.5950; 1,215.50 Italian lire, down from 1,223.00; and 1.1555 Canadian dollars, down from 1.1574.

Commodities

Prices of hog and pork belly futures rose sharply as low slaughter levels prompted speculation of a repeat of last year’s springtime rally, in which hog futures reached eight-year highs.

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On other commodity markets, cattle futures rose while precious metals, energy futures and crop futures ended mixed.

Live hog futures settled 0.20 cent to 1.08 cents higher on the Chicago Mercantile Exchange, with the contract for delivery in April at 53.55 cents a pound; frozen pork bellies were 1.37 to 2 cents higher, with May at 66.50 cents a pound.

Two cents is the maximum daily price move permitted in pork belly futures. The March belly contract expired at 66.10 cents a pound at noon Central Standard Time.

Hog slaughter levels are running about 3% below a year ago, which traders may perceive as an indication that fewer hogs are available for slaughter, analysts said.

Gold settled unchanged to 20 cents lower, with April at $363.50 an ounce. Oil prices advanced on the New York Mercantile Exchange, bouncing back from an early selloff in gasoline futures.

Light sweet crude oil was 19 to 44 cents higher, with May at $20.49 a barrel.

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