Stocks Fall Slightly as Tech Sell-Off Continues
Stocks drifted lower in light trading Thursday with the release of mixed economic data and a continued sell-off in computer-related shares.
The Dow Jones industrial average fell 28.54 points to 5,626.88, although advancing issues edged out decliners on the New York Stock Exchange. Broader indexes fell less than the Dow.
“It’s pretty mixed with a definite downside bias,” said James Solloway, research director at Argus Research.
Broad-market indexes were mostly lower with the further retreat of technology shares. The New York Stock Exchange’s composite index fell 0.14 point to 348.06, the Standard & Poor’s 500-stock index fell 0.79 point to 649.10, and the Nasdaq composite index fell 2.03 point to 1,099.79.
Bond yields were level, with many not changing at all. The 30-year treasury bond yield fell 0.01 to 6.62%.
The variety of job and economic activity data released Thursday was inconclusive. Taken together, the data show “almost an ideal ambiguity,” said Michael Metz, market strategist for Oppenheimer & Co. “We are in a reasonably healthy economy, but not one that has the momentum that the employment figures early this month indicated.”
Among market highlights:
* The day’s main trend was that investors continued selling computer issues, which have been dropping for days on concerns about whether the rate of personal-computer sales can be sustained.
IBM fell 2 1/8 to 114 7/8. Digital Equipment fell 2 3/4 to 53 1/4 in heavy trading. Hewlett-Packard was down 2 7/8 to 94 3/4, Bay Networks down 1 1/2 to 34 and Compaq down 1/8 to 38.
* Networking stocks also suffered. Cisco Systems, the Nasdaq volume leader, fell 1 1/4 to 44 3/4, and 3Com was off 7/8 at 42 1/8.
* Pharmaceutical and biotechnology shares, however, rose with other health-care issues as some investors shifted into recession-resistant names. Merck rose 2 1/2 to 65 1/2, Lilly added 4 5/8 to 66 5/8.
Pfizer gained 3 1/2 to 66 7/8 after a summary of a study was circulated on Wall Street. The study suggests that Aricept, which Pfizer is marketing under license from a Japanese company, is effective in treating Alzheimer’s disease. Goldman, Sachs upgraded the stock and added it to the firm’s “recommended” list.
Amgen advanced 1 7/8 to 61 3/4, and Genzyme climbed 3/8 to 62 5/8.
* Philip Morris resumed its fall, losing 2 3/4 to 86 3/4. Philip Morris had recovered slightly on Wednesday from the sizable losses that began last week when Liggett Group decided to break ranks and settle tobacco lawsuits.
* General Motors rose 1/8 to 53 5/8 after the company and the United Auto Workers union reached a tentative pact to end a 17-day strike at two brake plants that has virtually paralyzed its North American production.
* Hilton Hotels lost 2 7/8 to 92 3/4 after the company warned that its first-quarter results may fall short of estimates.
Among initial public offerings, Workgroup Technology, a designer of client/server product management software, rose 3 to close at 18, and Eagle River, which provides interactive marketing services, rose 1 3/4 to 14 3/4.
In overseas trading, the 225-share Nikkei stock index in Tokyo advanced 1.39% on heavy foreign buying after Wednesday’s holiday. The London and Frankfurt stock markets ended higher.
