STOCKS : Blue Chips Hit by Selling Wave; Dow Off 18.32
Blue chip stocks fell sharply in a late wave of selling Wednesday, but the broader market advanced after Tuesday’s big rally.
The Dow Jones average of 30 industrials, up 63.86 points on Tuesday, dropped 18.32 to 2,926.73.
But advancing shares still outpaced losers 959 to 664 in nationwide trading of New York Stock Exchange stocks. Big Board volume rose to 213.72 million shares from 189.53 million Tuesday.
Blue chips were hit by a bout of computerized selling in the final hour, and by general weakness in oil stocks.
The Big Board’s selloff took the wind out of smaller stocks as well. Still, the NASDAQ composite index finished up 3.85 points to close at a new record 495.05.
Traders said some investors continue to hope for a cut in interest rates, perhaps after the release of March employment data Friday.
Among the market highlights:
* Technology issues turned mixed. Software firm Legent tumbled 4 1/4 to 34 1/4 after it said quarterly results would be below expectations. Also losing were Apple, off 2 3/4 to 70, and Sun Microsystems, down 1 1/4 to 32 3/8.
But Microsoft rose 1 1/2 to 113 3/4. Shearson Lehman reiterated its “buy” rating on the company. Also, Compaq rose 1 3/8 to 64 3/8 and Motorola gained 1 1/4 to 58 5/8.
* Earnings concerns weighed on other stocks also. Pepsico dropped 1 5/8 to 34 after projecting first-quarter earnings of 25 to 26 cents a share, up from 23 cents a year ago.
* Dillard Department Stores jumped 7 to 108 as it launched a stock offering at $99 a share.
* Caesars World jumped 1 1/4 to 20 7/8 after Oppenheimer & Co. recommended the casino firm.
* Among Southland NASDAQ stocks that were higher, Bridgford Foods rose 1/2 to 19, Pic N Save gained 3/4 to 12 7/8, St. Ives Labs jumped 7/8 to 9 7/8 and Tekelec leaped 1 3/4 to 24 1/4.
In Mexico, the Bolsa index surged to a new high of 839,501, up 14,085 points, after the government cut a key short-term interest rate to a record low 21.24%.
Overseas, German shares surged 2.5% in active trading, following Wall Street’s Tuesday rally. The DAX average ended 38.88 points higher at 1,577.50.
Prices also rose sharply on the London Stock Exchange. The Financial Times 100-stock average was up 30.8 to 2,519.1.
In Tokyo, the key Nikkei 225-share average rose 528.06, or 2.01%, to 26,780.06, powered by Wall Street’s surge Tuesday.
Credit
Government bond prices were lower in light trading.
The Treasury’s bellwether 30-year bond declined 7/32 point, or $2.19 cents per $1,000 in face amount. Its yield rose to 8.24% from 8.22% late Tuesday.
“We’re just biding some time until the unemployment numbers come out on Friday,” said Michael Moran, bond trader at Donaldson, Lufkin & Jenrette Securities.
The fed funds rate, the interest on overnight loans between banks, fell to 5.50% from 6.25% on Tuesday.
Currency
The dollar edged higher against most major currencies in domestic trading after falling overseas as traders awaited the release of U.S. employment figures for March.
In New York, the dollar rose to 1.675 German marks from 1.670 on Tuesday. But it fell to 137.30 Japanese yen from 137.85.
Commodities
Prices of silver futures rose for the fourth straight day as hopes for an economic recovery helped lift the metal’s value to its highest level in nearly three weeks on New York’s Commodity Exchange.
Silver futures settled 7.2 to 7.8 cents higher, with the contract for delivery in April at $4.06 an ounce, the highest settlement for a spot silver contract since March 15.
Gold futures ended 90 cents to $1.80 higher, with April at $360.30 an ounce; platinum was $7.10 to $7.40 higher, with April at $400.20 an ounce.
With Wednesday’s gain, silver has risen by 24.9 cents, or 6.5%, in four days.
Elsewhere, light, sweet crude oil settled 17 to 28 cents lower with May at $19.47 a barrel.
Market Roundup, D6
