Dow Declines on Strong Dollar as Bonds Hit by Rate-Hike Fear
Blue-chip stocks fell Friday on worries that the strong dollar would hurt U.S. exports, while bond prices slid on expectations the Federal Reserve Board will raise interest rates next week.
The Dow Jones industrial average closed 15.49 points lower at 6,804.79. For the week, it lost 130.67 points.
Broader stock measures were mixed, with most blue-chip and other large-company shares posting modest gains. But the Nasdaq market turned lower late in the day as investors continued to sour on leading computer-industry shares.
Wall Streeters worried that the strong dollar was eroding the profit picture of multinationals, and they focused on Eastman Kodak, which tumbled more than 10%, and IBM, off 4 3/8 to 132 1/2, in consolidated trading.
Otherwise, the day was notably uneventful considering this week’s mounting anxiety over Tuesday’s Fed meeting. Even Friday’s “triple-witching” expirations--the quarterly deadline for settling futures and options contracts to buy and sell securities at specific prices--failed to produce the usual volatility.
The 30-year Treasury bond fell, pushing its yield 6.96%, up from to 6.95% Thursday. Even amid lackluster trading, expectation abounded that the Fed will tighten monetary policy next week.
Advancing issues outnumbered decliners by a slim margin on the New York Stock Exchange in heavy trading.
The Standard & Poor’s 500-stock list rose 1.45 to 784.10, and the NYSE’s composite index rose 1.02 to 412.80.
The Nasdaq composite index fell 5.19 to 1,254.07.
* Weighing down the Dow was Philip Morris, down 4 3/8 to 111 1/2, extending Thursday’s slide on news that rival cigarette maker Liggett Group had struck a deal with several states suing the tobacco industry. Liggett’s parent Brooke Group rose 1/8 to 5.
* Among the most actives were technology issues, including Cisco Systems, down 1 7/8 to 49 1/4; Fore Systems, down 1 9/16 to 18 3/8; Microsoft, down 2 to 94; and Intel, down 2 3/4 to 130 1/2.
* Concern that interest rates are headed higher continued to keep stocks from moving back toward their records. But several bank issues had a little bounce.
First Union rose 1 3/8 to 89 3/8, KeyCorp gained 1 3/8 to 52 3/4, Norwest jumped 5/8 to 49 7/8, Barnett Banks climbed 7/8 to 49 5/8, PNC Bank rose 1/2 to 42 1/2, Wachovia rose 1/2 to 60 1/8, and NationsBank rose 5/8 to 58 5/8.
* Ben & Jerry’s Homemade fell 1 5/8 to 11 5/8 after the ice cream company forecast a bigger-than-expected first-quarter loss. And Outback Steakhouse tumbled 4 1/2 to 19 1/8 after the restaurant operator said it expects fiscal first-quarter earnings to be below analysts’ estimates.
* Columbia/HCA Healthcare lost 2 3/4 to 38 1/2 on concern that a federal investigation of its El Paso operations could spread to other cities.
* Florida Panthers Holdings rallied 1 7/8 to 28 1/4 after agreeing to acquire Boca Raton Hotel & Club for $325 million in stock and debt, more than doubling billionaire H. Wayne Huizenga’s expansion into the hotel and resort industry.
* Geoworks tumbled 4 3/4 to 7 1/4 after the cellular phone software maker forecast lower-than-expected earnings.
The dollar slid to 1.6853 German marks in late trading from 1.6930 marks late Thursday. The dollar fell to 122.85 Japanese yen from 123.75 yen.
Overseas, Tokyo’s Nikkei index was up 0.8%, Frankfurt’s DAX index rose 1.0%, and London’s FT-SE 100 rose 0.1%.
Market Roundup, D4
