Stocks Fall Again; Inflation Data Due
Stocks closed broadly lower Thursday, continuing to stagnate after the modest rebound from last week’s slump.
Trading volume, however, was the slowest since early-January, as neither buyers nor sellers showed much conviction with major stock indexes still off 5% to 10% from their 1997 peaks.
The Dow Jones industrials slipped 23.79 points to 6,540.05, the lowest since last Friday.
Most broader indexes also were down slightly, as losers topped winners by 13 to 11 on the New York Stock Exchange and by 21 to 17 on Nasdaq.
“Investors are searching for something to sink their teeth into,” said Charles Crane, market strategist at Key Asset Management.
First-quarter corporate earnings reports provided some impetus for investors to act on Thursday, but there was little excitement overall about the numbers.
Elsewhere, a report from the mutual fund industry’s chief trade group confirmed expectations that stock-fund cash inflows slowed sharply in March. (Story, D12.)
Analysts said many investors remain sidelined ahead of today’s report on March wholesale inflation. A higher-than-expected number could spook the bond market, sending yields higher--and giving stock investors another reason to take some profits after the phenomenal bull market run of the last two years.
The bond market continued to tread water on Thursday. The 30-year Treasury bond yield ended at 7.10%, unchanged from Wednesday. Yields have been in the same narrow range all week.
Meanwhile, the dollar took a breather, falling from Wednesday’s highs after Japan’s Finance Ministry and U.S. Treasury Secretary Robert Rubin said they were concerned about the currency’s rapid rise.
The dollar rallied early Thursday to 127.10 yen in Tokyo, its highest level since August 1992, before Japanese government officials said the yen’s recent declines were too rapid and excessive.
The dollar also was knocked lower after Rubin said for the first time that the United States shared Japan’s concern about the weak yen. The dollar settled in New York at 125.65 yen, down from 126.77 Wednesday.
Meanwhile, the Japanese stock market fell to its lowest level since early-January. (Investor Spotlight, D10.)
Among Thursday’s market highlights:
* Stocks moving after the companies reported quarterly earnings included General Electric, down 3/8 to 101 1/2; Georgia-Pacific, up 1 5/8 to 73; Yahoo, down 1 12/16 to 32 11/16; Safeway, down 4 1/8 to 43 7/8; Phelps Dodge, up 1 1/8 to 73; TRW, down 3/8 to 49 3/4; and Fannie Mae, up 1/4 to 38 7/8.
* In the tech sector, PairGain Technologies plunged 4 1/8 to 25 3/4 even though its first-quarter earnings rose sharply.
Tech shares in general were weak. Intel fell 5 to 137 1/4 amid rumors that it will soon unveil aggressive price cuts on its microprocessors, steeper than those of the past few quarters.
Among other semiconductor stocks, Texas Instruments sank 3 5/8 to 82 5/8, Xilinx lost 3 5/16 to 46 7/8 and Advanced Micro Devices was off 2 to 39 3/4.
* Sears hurt the Dow index, falling 3 7/8 to 47 amid news that the retailer plans to repay bankrupt customers who were pressured to pay off their Sears credit cards.
* Many financial stocks continued to weaken. Wells Fargo fell 5 1/2 to 270 1/2, Bank of Boston dropped 1 3/8 to 67 1/4 and Chase Manhattan fell 1 3/8 to 94 1/8.
* On the plus side, electric utility stocks rallied as buyers were attracted to the beaten-down shares’ high dividend yields. The Dow utility stock index jumped 1.75 points, or 0.8%, to 215.83.
Southern Co. rose 1/4 to 21 1/4, Edison International added 1/4 to 22 1/8 and American Electric Power jumped 3/4 to 40 3/4.
* Merck rebounded 2 1/8 to 83 5/8 after sinking 3 3/4 Wednesday on worries that its anti-cholesterol drug is losing market share to a new drug from Warner-Lambert. Warner-Lambert fell 1 1/8 to 93 5/8.
