Tech Issues Hit Hard in Mixed Session
Stocks turned in a mixed performance Friday, with technology stocks suffering heavy losses and blue chips ending little changed.
But U.S. bonds rose for the first time this week as renewed strength in the dollar eased worries that foreign investors would shy away from Treasury securities.
The Dow Jones industrial average bounced around before finishing the day up 4.24 points at 6,931.62. The slight gain came after two days of losses that followed the market’s run to a high of 7,067.46 on Tuesday.
The technology-laden Nasdaq composite tumbled 13.08 points to 1,334.32.
Friday’s “double-witching” expiration of stock and stock-index-options contracts helped keep the market volatile.
“Where there is an expiration day, you tend to get very unpredictable swings in the market, and today was really no exception,” said Hugh Johnson, chief investment officer at First Albany Corp.
In the broader market, advancing issues narrowly outpaced decliners in average trading.
The relative quiet of the broad market masked a tumultuous session for technology stocks, which met with stiff selling.
Stemming some of the overall losses Friday were a stronger dollar and higher bond prices. Weakness in both markets on Thursday sent stocks tumbling.
The yield on the benchmark 30-year bond rose, driving its yield down to 6.63% from 6.65% on Thursday, when bonds posted their biggest losses in six weeks on strong economic news.
The Standard & Poor’s 500-stock index was down 1.03 points to 801.77, while the New York Stock Exchange composite index fell 0.08 point to 421.01.
Among Friday’s highlights:
* Weakest among blue chips was IBM, which fell 3 1/2 to 137 3/4. It was joined by other personal computer makers, which were hit by concerns that their profit margins may narrow in the second quarter. Compaq Computer fell 2 7/8 to 79 3/4, Dell Computer dropped 1 3/8 to 71 1/8 and Gateway 2000 slipped 1 1/2 to 60 1/2.
Among other technology issues, 3Com fell 1 1/2 to 38 5/8 and Cascade Communications slid 3 1/8 to 25 3/4, as shares in network companies continued to press lower.
The downdraft also drew in Cisco Systems, which tumbled 4 5/8 to 58 3/8; Intel, which fell 3 1/2 to 146 3/8; and Oracle, which dropped 7/8 to 40 7/8.
* One of the day’s biggest movers was Scholastic, down 24 3/4 to 36 3/4, a day after the publisher of the popular “Goosebumps” children’s books warned of a third-quarter loss.
* Oil shares gained. Chevron rose 1 1/4 to 66 7/8, Exxon climbed 5/8 to 103 3/4 and Texaco rose 3/4 to 102 1/4. Though crude oil prices fell to six-month lows, many traders are expecting a bigger decline after Iraq begins shipping again.
In New York, the dollar settled at 123.28 yen, up from 122.55 yen on Thursday.
Overseas, Tokyo’s Nikkei stock average fell 0.1%, Frankfurt’s DAX index was down 0.4% and London’s FTSE-100 was down 0.4%.
Market Roundup, D4
