Dow Makes It 7 Straight--but Barely
The Dow Jones industrial average eked out its seventh straight record finish, but the broader market ended slightly lower Tuesday after recovering from a discouraging report on semiconductor orders.
The Dow 30, which cracked the 5,600-mark for the first time on Monday, edged to 5,601.23, a gain of just 1.08 points. But that was enough to keep its streak of record closes going--the famed measure’s longest since a nine-session string in January 1987.
Other major indexes ended the day lower. The technology-laden Nasdaq composite index plunged more than 15 points in the morning, but it cut its losses by almost half by the end of trading, finishing down 8.16 points at 1,087.22. Other broad-market indexes ended slightly lower after recovering from an early plunge led by technology issues.
On Monday evening, the Semiconductor Industry Assn. reported that demand for computers chips had sagged in January, with the number of new orders dropping below that of shipments for the first time in five years. The report follows other indications of a slowdown in the U.S. computer market. Some observers said, however, that the figures are not shocking and that the stocks were already battered by expectations.
“The market is not marching to the strength of the techs,” said Joseph Barthel, chief investment strategist at Fahnestock & Co. “What is driving the market is the stability in interest rates, expectations of another discount rate cut and the major inflow into mutual funds.
“There is continuing growing evidence that the Fed will ease. Fifteen of the last 19 initial discount rate cuts have been followed by second cuts within 45 days.”
The bond market was stable, with short-term yields falling slightly and the yield of the Treasury’s main 30-year bond unchanged at 6.03%.
Declining issues outnumbered advancers by about 9 to 8 on the New York Stock Exchange, where volume totaled 440.75 million shares as of 4 p.m., up from 397.84 million on Monday.
The NYSE composite index lost 0.41 point to 351.29, the Standard & Poor’s 500-stock index fell 0.94 point to 660.51, and the American Stock Exchange’s market value index fell 1.84 points to 560.62.
Among market highlights:
* Among the losing tech stocks were Texas Instruments, down 1 1/4 to 50 3/4 and IBM, off 1 1/2 at 113 7/8. Compaq fell 1 1/4 to 49 7/8, and Intel sank 1-7/64 to 57 1/8.
* McDonald’s fell 1 1/2 to 52 5/8 after Bear, Stearns & Co. downgraded the stock of the fast-food chain.
* W.R. Grace fell 1 5/8 to 67 7/8 on news that its National Medical Care unit has been told it is the subject of a federal grand jury investigations into “possible violations of criminal law.”
* Office Depot lost 7/8 to 19 1/4 after it reported quarterly results that were at the low end of expectations.
* Cigna rose 3 to 121 5/8 after a Pennsylvania judge ruled that the health-care company could go ahead with its restructuring while an appeal by its competitors, including American International Group Inc., is being heard.
* Delta Air Lines rose 3 1/4 to 75 1/8 after Goldman, Sachs & Co. upgraded its opinion of the stock.
* Discreet Logic tumbled 12 1/2 to 11 1/4 on news of the resignation of David Macrae as its president and chief executive.
* Shares of local telephone companies slipped after surging on Monday. Merrill Lynch & Co. lowered its long-term opinion on BellSouth . and US West to “above average” from “buy.”
BellSouth lost 1 to 44 1/2, after adding 1 5/8 on Monday, and US West fell 1 1/4 to 35 3/4. Other telephone shares slipped, Ameritech slumped 1 1/2 to 64 7/8 and Bell Atlantic skidded 7/8 to 73 1/2.
* Teledyne rose 1 to 28 after board member Ronald LaBow sweetened his acquisition offer to $1.67 billion, or $30 a share. The maker of aviation electronics, among other things, has spurned two offers LaBow since November 1994.
* International Paper dropped 3/4 to 39 3/4 after the paper company said it would take a $500-million charge against its first-quarter earnings for costs of closing several plants and moves to boost the profitability of its imaging-products business.
* United Technologies jumped 2 7/8 to 105 3/4. The maker of Carrier air conditioners and Otis elevators said it would use its free cash to acquire companies and buy back shares during the next two years, the Wall Street Journal reported.
Overseas, the Tokyo 225-share Nikkei stock average fell 0.7%, the Frankfurt DAX index rose 0.2% and the London FTSE-100 gained 0.6%.
Energy prices soared to four-week highs Tuesday, propelled by forecasts for cold weather and an apparent lack of progress in negotiations to allow Iraq to make a limited oil sale.
Cold weather forecasts for both the East Coast and northern Europe drove up heating oil and natural gas prices, with supplies already taxed by frigid winter weather.
News that the first round of United Nations talks with Iraq on oil sales ended Tuesday without any indications of an agreement also contributed to that market’s strength. Gas prices were also powered by an industry report showing gas held in storage at 31% the amount of a year ago, at 589 billion cubic feet.
Some traders have anticipated a deal with Iraq that would ease the six-year embargo.
March crude oil surged 94 cents to $18.91 a barrel, the highest price for a spot contract at the New York Mercantile Exchange since Jan. 19. March heating oil jumped 3.05 cents to 56.74 cents a gallon, and March gasoline gained 2.11 cents to 55.11 cents a gallon.
