Dow Falls 1.79 on Day Lacking Economic News : Market Overview

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

* Stocks were mixed, as another surge in heavy-industry issues was offset by profit taking in other stocks. The Dow Jones industrials dipped 1.79 points to 3,254.25.

* Bond yields also were flat, while gold and silver continued to slump, adding to Tuesday’s big selloff in metals.

Stocks

Market sentiment was helped by U.S. Treasury Secretary Nicholas Brady’s comments that a recovery is underway, and by the Federal Reserve’s “beige book” look at the economy, which showed gains.

Advancing issues outnumbered declines by 9 to 8 on the New York Stock Exchange, as share volume totaled 194.14 million shares, up from Tuesday’s 188.80 million.

Still, most major stock indexes finished marginally lower. Smaller stocks rose, however, with the NASDAQ composite index climbing 1.67 points to 624.94.

Analysts say more investors believe that an economic recovery is underway, but that there is uncertainty over how quickly the improvement will show up in corporate earnings.

“The key will be when earnings come out full force,” said Alice Sadlo, analyst at brokerage McDonald & Co. “That will determine if the market will move above 3,300” on the Dow index.

One factor holding stocks back this week: Key stock index futures and options contracts, as well as individual stock options, expire today and Friday. Such “triple witching” expirations--which occur once a quarter--can cause wide swings in the market.

Among the market highlights:

* The day’s biggest stunner was an announcement from Pittsburgh-based waste-disposal firm Chambers Development, which said it is changing its accounting procedures--and in the process, the company said it must restate its 1991 earnings to just 3 cents a share last year, versus the 83 cents it previously reported.

The news sent Chambers’ Class A stock plummeting 19 to 11 1/4 and its Class B shares down 19 to 11 1/2. Both trade on the American Stock Exchange.

The accounting change confirmed some of Wall Street’s deep suspicions about the way garbage firms account for expenses. That rattled many other waste-disposal stocks: Waste Management dropped 2 1/4 to 40 1/2, Mid-America Waste lost 2 5/8 to 20 1/8, and L.A.-based Western Waste slid 1 to 13 1/2.

* On the plus side, the improving economic outlook continued to push up many industrial issues, whose fortunes should rise with the economy. Caterpillar rose 1 1/2 to 49 5/8, machinery maker Ingersoll-Rand added 2 1/2 to 64 1/2, Cummins Engine jumped 2 1/8 to 62 1/2, Ford advanced 3/4 to 39, Georgia-Pacific rocketed 2 1/8 to 69 7/8, and Weyerhaeuser zoomed 1 5/8 to 37 3/8.

* Investors also returned to some consumer growth issues. Seagram soared 5 3/8 to 117 1/8 after announcing a 4-for-1 stock split and a 12% dividend hike.

Other winners in the consumer sector included Mattel, up 1 5/8 to 34 3/8; McDonald’s, up 1 3/8 to 44 1/4, and home health care provider Homedco, up 2 to 23 1/4.

* On the downside, Federal Express plunged 6 to 49 1/4 after Moody’s said it may downgrade the company’s debt. FedEx on Monday announced that it will pare European operations.

* Pacific Telesis, parent of Pacific Bell, lost 1/4 to 38 1/2, a 52-week low. There was no news.

* Santa Monica-based Veterinary Centers was unchanged at 5 1/8. The firm said it will move its stock from the American exchange to the NASDAQ market today.

Overseas, Tokyo stocks closed down again, continuing the market’s bear trend. The Nikkei average lost 153.32 points to 19,764.31. However, in afternoon trading today the Nikkei was up 365.96 points to 20,130.27.

Worries about a potential Labor victory in Britain’s upcoming elections sent London’s Financial Times 100-share average down 26.5 points to 2,464.7.

In Frankfurt, the DAX average edged up 2.11 points to 1,732.18.

Credit

The price of the Treasury’s 30-year bond slipped 1/32 point, or 31 cents per $1,000. That pushed the yield up to 8.01% from 8% Tuesday. But yields on most shorter-term bonds were flat.

The Fed’s “beige book” report suggested a modest economic recovery is underway, which helped calm the fears of bond traders who worry about a surging economy--and with it, inflation.

Investors may have been positioning themselves for the release today of a weekly report on new unemployment filings.

Bond traders continue to hang on each economic report, looking for justification either to dump bonds (if they see too much economic strength) or buy more (if they see economic weakness, suggesting lower interest rates ahead).

The fed funds rate, the rate on overnight loans between banks, was 3.25% versus 3.875% Tuesday.

Currency

The dollar was mixed in lethargic trading as investors adjusted their holdings before the release of U.S. trade-deficit figures for January, expected today.

The dollar fell in New York to 132.30 Japanese yen from 132.80 Tuesday. It also closed at 1.654 German marks, up from 1.646.

Commodities

Precious metals prices continued to drop, as a victory for apartheid reformers in South Africa seemed to ensure that supplies of platinum and gold won’t be interrupted.

Platinum for April sank $5.70 to $346.90 an ounce on the New York Merc, after falling $7.90 on Tuesday. On New York’s Comex, March gold fell $1.70 to a new six-year low of $338.40 an ounce, after losing $3.20 on Tuesday.

Also, March silver slipped 1.7 cents to $4.03 an ounce, after dropping 3 cents Tuesday.

Elsewhere, light, sweet crude oil for April fell 17 cents to $19.07 a barrel on the New York Merc.

Market Roundup, D8