Dow Falls 19.01 on Profit Worries : Market Overview

Highlights of Monday’s market activity, compiled from Times staff and wire reports:

* Stocks fell broadly on heightened investor fears about third-quarter corporate earnings.

The Dow Jones industrial average lost 19.01 points to 2,942.75, extending its loss during the past three sessions to 69.77 points.

* Treasury bond yields inched up, but T-bill rates fell to their lowest levels in 14 years.

Stocks

The market turned gloomy after Westinghouse Electric reported a $1.48-billion third-quarter loss. The company blamed sour real estate investments by its financial services subsidiary.

Westinghouse, whose stock plunged 2 5/8 to 19 1/8, is among the first of major industrial companies to report third-quarter results. (Story, D5.)

The bad news was a bitter pill for investors. In the broad market, declining issues outnumbered advances by more than 2 to 1 on the New York Stock Exchange.

But volume remained moderate at 148.53 million shares, compared to 164.10 million Friday.

“We had bad news on American Express last week, and Westinghouse is a disaster today,” said Ron Hill of Brown Bros. Harriman. “We’re not off to a good start.”

“You’re not supposed to get so many negative surprises at the beginning of an earnings season,” he said. “The fear has become that the year is going to be a bad one.”

Market highlights:

* The plunge of Westinghouse didn’t drag down other blue chip stocks across the board but rather encouraged selective selling, traders said. For example, GE lost 1 1/8 to 67 1/4, Goodyear fell 1 1/4 to 41 7/8 and Kodak dropped 1 1/8 to 41.

Banks and other financial stocks fared worse, on new worries about real estate writeoffs. Wells Fargo fell 2 7/8 to 68 3/8, First Interstate lost 1 3/8 to 27 1/4, BankAmerica dropped 1 to 39 1/2 and Federal Home Loan Mortgage slid 2 3/4 to 100 1/8.

* National Medical Enterprises plummeted 4 1/8 to 16 1/8 as the hospital company revealed state probes into its psychiatric hospitals. (Story, D2.) The news hit other hospital stocks, including Continental Medical, off 1 1/8 to 32 1/4; Humana, down 5/8 to 28 3/4, and Critical Care, off 3/4 to 40 3/4.

* McDonnell Douglas, down last week on financial concerns, rebounded 2 3/8 to 61 1/2 after it signed a $400-million, three-year credit agreement with five major banks.

Overseas, Tokyo issues slumped in thin trading. The Nikkei average fell 266.07 points to 24,330.83.

In London, the Financial Times 100-share average lost 28.4 points to 2,596.2. In Frankfurt, the DAX average fell through the psychologically key 1,600 level, ending 13.07 points lower at 1,588.66.

Credit

The Treasury’s 30-year bond fell 1/8 point, or about $1.25 per $1,000 in light profit taking after Friday’s rally. That boosted the yield to 7.79% from Friday’s 7.78%.

Still, optimism about lower rates ahead was evident at the weekly Treasury bill auction: Rates on newly auctioned three-month bills fell to 5.04%, lowest since 1977.

The federal funds rate, the interest on overnight loans between banks, was quoted at 5.188%, up from 5% Friday.

Currency

The Japanese yen continued to dominate trading while the dollar kept to a tight range.

In New York, the dollar closed at 1.681 German marks, up from 1.678 Friday, and at 129.40 Japanese yen, down from 129.90.

Commodities

Oil prices jumped to their highest close since the Gulf War, on expectations of tight supplies ahead.

Light, sweet crude oil for delivery in November settled at $22.98 per barrel, up 37 cents, on the New York Mercantile Exchange. Oil for next-month delivery had not settled that high since Jan. 22, when the final price was $24.18 a barrel.

On New York’s Comex, December gold rose 30 cents to $362 an ounce; December silver lost 2.2 cents to $4.15.

Market Roundup, D10