Stocks Mixed; Yields and Dollar Rise
Wall Street stocks closed mixed Monday as investors moved out of blue chips and into lagging technology shares. The dollar rose against the yen and mark amid signs of economic weakness in Germany and fears Tokyo would do little to aid its own economy.
Meanwhile, bonds fell on lingering fears over the inflationary implications of Friday’s report that showed the jobless rate in November was the lowest in nearly 25 years.
Bonds were pressured by a supply of new Treasury securities and reports that Japan might sell some of its huge Treasury holdings to help its beleaguered banking system.
The Dow Jones industrial average fell 38.29 points to 8,110.84, ending a six-session winning streak that had put the blue-chip barometer in striking distance of its all-time best close of 8,259.31, set Aug. 6.
Broad-market indicators were mixed, with advancing issues outnumbering decliners by a 6-5 margin. Both the Standard & Poor’s 500 list and the New York Stock Exchange composite index slipped from record heights.
“The Dow is up 1,200 in the last six weeks, so we’re more than entitled to a little ‘R&R;,’ ” said Alfred E. Goldman, director of market analysis at AG Edwards & Sons Inc. in St. Louis.
The S&P; 500, which on Friday closed at a record high for the first time since early October, fell 1.42 points to 982.37. The NYSE composite index, which also set a new high on Friday after a two-month drought, fell 0.87 point to 513.44.
But the technology-heavy Nasdaq composite index rose 17.64 points to 1,651.54. Microsoft rose $3 to $146.13, and Dell Computer gained $2.25 to $96, leading the Nasdaq advance. The technology group could come under pressure today, however, due to a disappointing earnings report from Oracle after Monday’s close. Oracle rose $1.19 to $32.38 in advance of the report, but fell sharply in after-hours trading.
The Russell 2,000 index of small companies rose 3.97 points to 442.03.
The Dow’s biggest decliner was Coca-Cola, which fell $2.50 to $63.56 after Morgan Stanley Dean Witter lowered its earnings forecast for the soft-drink maker.
The blue-chip sector was also pressured by another weak day in the bond market, where interest rates rose for the third straight session after falling to a 22-month low last week.
The price of the 30-year Treasury bond fell, boosting its yield to 6.14% from Friday’s close at 6.09%.
Among Monday’s highlights:
* Banks rose after First American said it agreed to buy Deposit Guaranty, and Union Bank of Switzerland and Swiss Bank Corp. said they will merge, intensifying speculation that other combinations are in store.
Mellon Bank rose $4.38 to $63, Banc One gained $1 to $56.50 and NationsBank rose $1.13 to $62.13.
First American, parent company of First American National Bank, offered 1.17 of its own shares for each Deposit Guaranty share, valuing Deposit Guaranty’s stock at $64.06. Deposit Guaranty rose $4.63 to $57, and First American fell $5.19 to $49.56.
* The Dow Jones transportation average rose 1% to 3352.43, just 0.5% below its Oct. 21 record. Delta Air Lines gained $1.38 to $119.19; UAL rose $2 to $93.06.
In currency trading, the dollar rose against the German mark on signs of economic weakness in Germany. It ended at 1.7895 marks, up from 1.7822 late Friday.
Investors took the dollar higher against the Japanese yen as the Tokyo’s Nikkei index of 225 leading Japanese stocks fell 1.8% in overnight trading.
The dollar hit its highest level since May 1992, closing at 130.45, up from 130.20 Friday.
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Market Roundup, D12
