FINANCIAL MARKETS : Tech Stocks Have Another Unsettled Day
Stocks staged a partial comeback Tuesday as Wall Street faced another unsettled day for technology issues.
The Dow Jones industrial average improved in late trading to wind up with a gain of 14.44 points at 4,608.44. Other widely followed market indicators advanced modestly.
The New York Stock Exchange composite index crept up 0.27 point to 300.96, and the Standard & Poor’s 500 rose 0.95 point to 560.00. Losers held an edge of about 6 to 5 over gainers on the Big Board, where volume was 311,290,000 shares, up from 267,870,000 on Monday.
At the American Stock Exchange, the market value index slid 1.99 to 528.19.
The Nasdaq Stock Market, where technology issues predominate, remained under pressure as investors sold to collect profits amassed during a run-up earlier this year in prices of semiconductor, software and related computer shares. Its composite slid 4.51 points to 1,003.64.
The selling subsided slightly during the session as investors sifted through the sector for attractive buys. Companies judged to have profit potential rebounded.
Among Tuesday’s highlights:
* Several beneficiaries of the renewed buying were among the NYSE’s active issues. After losing ground for much of the day, volume leader Micron Technology ended up 1/4 at 71 7/8, and Motorola rose 2 to 72 7/8 and Texas Instruments rose 1 1/8 to 72.
* The stock of International Business Machines ended up 7/8 at 102 1/2 after hitting a session low of 98 5/8. Intel rose 1/4 to 58 7/8 after sinking to 57 1/8 early in the day.
* Microsoft added 1 13/16 to 91 7/8 after hitting a low of 87. The recovery was sparked by the company’s comment that sales of its new Windows 95 software were meeting or exceeding expectations.
Opinions vary about where the technology group might be headed.
Eugene Peroni, technical analyst at Janney Montgomery Scott in Philadelphia, said the sector’s leadership is being tested but that it should remain intact. “I like the behavior, remembering that the group typically undergoes sharp and short-lived corrections,” he said. “This selling should resolve a lot of the group’s excesses through a sideways course rather than a cascading retreat.”
Charles Crane, director of research for the investment management firm Spears, Benzak, Salomon & Farrell, agreed that the business fundamentals affecting the technology group remain healthy, but said the market nonetheless could be headed for a difficult period. “Investors may end the year with their arms and legs intact but might be missing a toe or two,” he said.
The dollar, meanwhile, rose to an 11-day high against the yen after a Japanese newswire reported that the International Monetary Fund will call on Japan to lower interest rates. The dollar rose to 98.05 yen from 96.69 late Monday.
The dollar also rose against the German mark on expectations that Germany’s 14-day securities repurchase rate, a key money-market rate, will fall Wednesday after the Bundesbank’s official rate cuts last week. The dollar was last at 1.4765 marks, up from 1.4674 marks late Monday.
In its report, due out in October, the IMF said the Japanese economy is “in its worst shape” in 50 years, according to the Nikkei English News. The IMF pared forecasts for growth to 0.4% from 1.8% in 1995 and 1.5% from 3.5% in 1996, Nikkei reported. Even though Japan’s official discount rate stands at a record low of 1%, the IMF report said Japan has room to cut rates further.
Bonds were little changed. The yield of the 30-year bond rose to 6.71% from 6.70% on Monday.
In Tokyo, the 225-issue Nikkei index rose 287.87 points to 18,135.16.
