FINANCIAL MARKETS : Wall Street Closes Mixed; Techs Rally
The stock market churned for a second consecutive session on Wednesday, as a selloff in some industrial issues was offset by a rally in technology stocks.
The Dow Jones industrial average edged down 2.02 points to 3,935.37, but many broader indexes posted gains. The Nasdaq composite index of mostly smaller stocks jumped 4.80 points to 783.77, fueled by tech issues.
The blue-chip Standard & Poor’s 500 index closed up 0.38 point at 481.19 after briefly topping its all-time high of 482.00, reached on Feb. 2, 1994. The S&P; traded as high as 482.60 on Wednesday.
On the New York Stock Exchange advancing issues narrowly led decliners by 11 to 10. Volume remained active.
Stocks had rallied for five sessions through Monday, as investors increasingly took the view that the economy is slowing enough to preclude further interest rate hikes by the Federal Reserve Board.
But that point of view has been negative for certain industrial issues whose fortunes are tied to the economy’s swings. Declines in some of those issues have been a drag on the Dow index this week.
“The Dow’s not doing much, primarily due to the economically sensitives,” said Timothy Straus, manager of institutional sales at Hancock Institutional Services.
Analysts also said the market was cautious ahead of Friday’s wholesale inflation report for January. Investors fear that any surprise jump in inflation could send interest rates rocketing again.
In the bond market Wednesday, yields were mostly unchanged as the Treasury’s sale of new 10-year notes went as expected.
The 30-year Treasury bond yield, meanwhile, edged up to 7.65% from 7.64% on Tuesday. The government will sell new 30-year T-bonds today.
In currency markets, the dollar slipped against the Japanese yen and the German mark. The greenback closed in New York at 98.95 yen, down from 99.46 on Tuesday. It also closed at 1.531 marks, down from 1.536.
Among Wednesday’s highlights:
* Industrial stocks weighing down the Dow included Alcoa, off 2 to 78; Goodyear Tire, down 1 to 35 7/8; and GM, off 5/8 to 38 7/8.
* Semiconductor stocks rallied as Merrill Lynch named Intel its “Focus One” stock of the week. Intel rocketed 3 5/8 to 76 5/8, Micron Technology jumped 2 5/8 to 47 7/8, Cirrus Logic added 1 7/8 to 32 7/8 and Texas Instruments gained 1 3/4 to 75.
Among other tech issues, Compaq rose 1 1/2 to 36 7/8, Novell added 7/8 to 20 1/4 and Apple surged 1 1/2 to 42 5/16.
* Biotech giant Amgen closed up 5 3/8 to 70 3/4 after soaring as high as 76 1/8 on renewed rumors that it could be a takeover target of Bristol-Myers, whose stock fell 1 to 60 7/8.
Other biotech issues rose as well, with Biogen up 1 1/4 to 39 3/4, Genzyme up 1 3/8 to 39 7/8 and Biomatrix up 3/8 to 3 5/8.
* Classic growth stocks were mixed after their recent rally, which has in part reflected investors’ hunger for stocks of companies whose earnings are less dependent on a vibrant economy. Wednesday’s gainers included Disney, up 1 1/8 to 53 1/4; Hershey Foods, up 1 3/8 to 50 3/4; and Warner Lambert, up 1 1/8 to 80.
But Procter & Gamble lost 3/4 to 65 5/8 and Gillette eased 3/8 to 78 1/4.
* Sears leaped 2 1/4 to 48 after the retailing and insurance giant reported a 26% jump in fourth-quarter profit.
* On the downside, Southland-based Quantum Health Resources sank 4 7/16 to 26 3/16 after it canceled a scheduled meeting with analysts at a Smith Barney health care conference--fueling speculation that fourth-quarter earnings may fall short of expectations.
The company, which provides chronic-disease management services, wouldn’t comment on earnings, but did deny another rumor that its chief executive was hospitalized. Quantum said the meeting cancellation was due to “business reasons.”
* Another Southland firm, toiletries maker Dep, saw its Class A shares fall 5/8 to 1 3/4 after saying it expects to post a loss of 10 cents to 15 cents a share for its fiscal second quarter, because of slumping sales of its Agree and Halsa hair products and mounting interest expense related to its acquisition of the brands.
The company said sales in the quarter ended Jan. 30 fell about 7% from the year-ago period.
As a result of the loss forecast for the recent quarter, Dep said it may not meet some of its financial covenants and may be in technical default of its bank loan. The firm will seek a waiver from its lenders.
Among foreign stock markets Tokyo’s Nikkei-225 average fell 210.30 points to close at 18,290,25. In Europe, Frankfurt’s DAX index ended down 4.87 points at 2,087.62, while London’s FTSE-100 average closed at 3,072.5, off 0.2 point.
In Mexico City, the Bolsa index closed off marginally at 1,960.86.
Market Roundup, D6
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Interest Rates:
30-year T-Bond: 7.65%
1-year T-Bill: 6.70%
