Kodak Drop Pulls Dow Down 25.71
* A steep slide in shares of Eastman Kodak dragged blue-chip stocks to a sharply lower close Wednesday.
* Long-term interest rates dipped as states and cities, flush with cash from municipal bond sales, quickly squirreled the money away in bond government securities.
Stocks
The sharp decline in Kodak shares after the company made a disappointing earnings projection for next year pushed the Dow Jones industrial average down 25.71 points to 3,716.92, on 331.8 million shares. In the broader market, declining issues outnumbered advances by about 4 to 3 on the New York Stock Exchange.
Other than Kodak, which tumbled 7 1/4 to 55 1/2, investors were reluctant to make new bets on stocks, as they have been over the past several sessions.
“We’re close to the end of the year and many institutional money managers have already closed their books,” said Edward Nicoski, chief market strategist for Piper, Jaffray in Minneapolis.
In addition, Friday marks a so-called “triple witching” day and many investors typically stay out of the market until the dust settles, Nicoski said.
The quarterly expirations of stock-index futures, stock-index options and options on individual stocks mean market participants must realign their portfolios, typically leading to volatile activity and swings in stock prices.
And shares ended mixed overseas. Tokyo’s stocks jumped at the close, with the Nikkei average closing at 17,489.15, up 180.42 points. In London, an interest rate cut and boosted the Financial Times 100-share average 30.4 point to finish at 3,278.8. Mexico’s Bolsa closed up 23.27 points at 2,389.86.
In Frankfurt however, the 30-share DAX average ended down 39.27 points at 2,110.70.
Among the market highlights:
* Archer-Daniels-Midland, up 1 1/4 to 23 5/8. A Merrill Lynch analyst raised a rating on the stock, citing a national smog-control plan that will benefit the company. The Environmental Protection Agency is expected to unveil a smog-control plan that will substantially increase the use of corn-derived ethanol in motor fuel. Archer-Daniels dominates the ethanol market.
* Carter Hawley Hale Stores, down 1/8 to 9 5/8. The Los Angeles-based retailer agreed to sell $125 million of 6.25% convertible senior subordinated notes through a private placement.
* Boeing gained 1 5/8 to close at 42 3/4 after the company reported new orders from Brazilian airline Transbrasil and from Korean Air.
* Amway Asia Pacific Fund, a new offering traded on the NYSE, ended at 28 5/8, up significantly from its initial pricing at $18 each for the 7.9 million common shares.
* On the Nasdaq, TJ International dropped 4 to 25 1/4 and Inacom fell 3 1/2 to 13 3/4. TJ dropped after First Boston lowered its 1994 earnings estimate for the company to 90 cents a share from $1.15. Inacom stock, meanwhile, fell after the company said its fourth-quarter earnings will be below market forecasts.
* Among active issues, CompUSA lost 2 1/8 to 20 3/8 after the surprise resignation of its chairman, Nathan Morton.
* On the American Stock Exchange, Xytronyx rose 1 3/4 to 9 1/4. CNBC financial correspondent Dan Dorfman cited an analyst’s positive views on the company, which researches and develops biotechnology products.
Other Markets
Municipalities sold about $2 billion in new bonds Wednesday in a year-end rush to borrow money from the credit markets before interest rates head higher.
The Treasury’s main 30-year yield dipped to 6.27% from 6.28%, pushing the price up 5/32 point, or $1.56 per $1,000 in face value as the money poured into government bonds.
Prices of most shorter-term maturities rose marginally.
Meanwhile, the dollar was mostly higher Wednesday in lackluster, light-volume trading amid solid signs on the economy and concerns about the political future of Russia.
Elsewhere, gold for current delivery rose 40 cents to $387.40 an ounce on the New York Comex, while silver closed unchanged at $5.086 an ounce.
