Dow Off 43, Broad Indexes Mixed After Late Sell-Off

Late sell programs erased early gains Wednesday, sending the Dow Jones industrial average sharply lower near the close but leaving the broad stock market mixed.

The Dow ended down 43.00 points at 5,506.21 after giving up a morning gain of more than 30 points.

But the broad market did not perform nearly so poorly. Advancing issues barely led decliners on the New York Stock Exchange. Big Board volume was heavy at 447.05 million shares, above Tuesday’s pace.

And broad indexes weathered the drop in blue chips, finishing narrowly mixed. The NYSE’s composite index fell 0.97 points to 344.62. Standard & Poor’s 500-stock index declined 2.49 points to 644.75.

But the Nasdaq composite index rose 1.38 points to 1,107.55, and the American Stock Exchange’s market value index added 2.80 points to 566.66.

Early in the day, stocks were helped along by the bond market, which sent rates on the 30-year U.S. Treasury bond down to 6.43% during the day. But at the end of the day, the yield of the long Treasury bond was unchanged from Tuesday at 6.47%.

The Labor Department said consumer prices shot up 0.4% in January, the biggest advance in more than two years. Economists had expected a rise of 0.3%.

The Commerce Department said business inventories fell 0.5% in December, while sales rose 1%. That suggested to investors that manufacturers might increase production to replenish inventories, which could produce a potentially inflationary increase in economic activity.

Sales of existing homes fell 4.1% in January, but the National Assn. of Realtors blamed the decline on winter blizzards and consumer unease.

Bob Dickey, managing director and technical analyst at Dain Bosworth Inc. in Minneapolis, said the market was reacting to two major crosscurrents.

In one corner are “folks who are seeing risk of higher rates and potentially a slowdown in the economy,” Dickey said. “Those are the people taking profits right now.”

Offsetting them are money managers who continue to receive heavy cash in-flows from investors. They have to put that money to work for their customers by buying stocks, and the buying has kept stock prices aloft, Dickey said.

On Tuesday, the Investment Company Institute, a mutual-fund trade organization, said investors poured an unprecedented $29 billion into stock mutual funds in January, eclipsing earlier estimates and almost tripling the previous January record, set in 1994, of $10.5 billion.

Among market highlights:

* AT&T; finished unchanged at 64 after strong morning gains. The company said Tuesday it will offer free Internet service on a limited basis.

But AT&T;’s announcement pushed down the stocks of companies that offer Internet access for a fee. In Nasdaq trading, America Online fell 1 3/4 to 47 3/8 and Netcom fell 2 3/8 to 20 3/8.

* Chrysler rose 1 1/2 to 56 3/4, after Furman Selz upgraded the stock to “buy” from “hold,” pushing other auto stocks up with it. Ford rose 1/4 to 31 1/2, and General Motors climbed 1/8 to 51 5/8.

* Topping the NYSE actives list was EMC, which rose 1/2 to 21 3/4 on speculation that the company may unveil new computer products at a meeting with analysts on Monday.

* Boston Scientific jumped 5 3/4 to 48 1/4 after it reported fourth-quarter results that exceeded analysts’ estimates.