Stocks Laze Day Away After Record Highs
Blue-chip stocks edged lower Friday as the market took a breather after this week’s series of record-closing highs, driven by Federal Reserve Board Chairman Alan Greenspan’s comments about the economy.
Bonds also fell, but the dollar surged to its highest level against the Swiss franc in four years and rose against the German mark for a fifth day in a row.
The Dow Jones industrial average ended 3.49 points lower at 8,113.44, pausing after three straight record closes. For the week, the index was up 222.98 points.
Smaller-company shares outperformed the blue-chip stocks, producing a mixed finish, but broad-market indicators barely strayed from Thursday’s closing levels. Even so, analysts remained impressed by the market’s resiliency after another strong week.
There were pockets of nervous activity in the market, particularly among shares in personal computer makers. That group, which has rallied fiercely of late, saw its fortunes reverse after one of the companies, Gateway 2000, posted uninspiring earnings.
But the selling was narrowly focused, and the technology-laden Nasdaq composite index managed to scratch out a marginal gain, closing up 0.45 of a point to 1,569.58.
There wasn’t much of a reaction to the day’s economic news, which did little to alter the market’s upbeat outlook for steady economic growth with tame inflation and interest rates. Analysts said investors are more concerned about next week’s readings on employment costs, which typically account for two-thirds of a product’s price.
The Commerce Department reported Friday that orders for big-ticket manufactured goods perked up a surprising 2.3% in June, while the National Assn. of Realtors reported that sales of existing homes slipped 2.6%.
In the bond market, the 30-year Treasury fell, raising its yield to 6.45%, from 6.43% at Thursday’s close.
Advancing issues barely outnumbered decliners on the New York Stock Exchange, where trading volume was fairly heavy.
The Standard & Poor’s 500-stock list fell 1.51 points to 938.79, and the NYSE composite index fell 0.51 point to 486.80. Both measures closed at record highs on Thursday.
Among Friday’s highlights:
* Among other PC maker shares, Dell Computer fell $7 to $163; Gateway 2000 fell $2.69 to $40.50; and Compaq Computer fell $5.25 to $135.63.
Other computer issues were lower as well. International Business Machines fell 81 cents to $107. But Microsoft rose 50 cents to close at $138.50.
* The Dow’s biggest decliners were International Paper, down $2.06 to $57.13; Travelers Group, down $1.06 to $69.69; and 3M, down $1 to $94.63. Caterpillar rose $1.38 to $38.88, and Wal-Mart rose $1.38 to $38.88 to cushion the Dow’s fall.
* The American Stock Exchange’s pharmaceutical index, which has risen 38% this year, far outpacing the broad market, fell 6.45 points to 496.87 in the wake of the news from Pfizer that growth in the second half of the year may be slow.
Pfizer fell $2.13 to $59.63. Merck dropped 75 cents to $103, and Eli Lilly lost $3.19 to $112.94. Bristol-Myers Squibb dropped $1 to $81.88, after losing a patent infringement suit involving its second-biggest-selling drug, the anti-cancer treatment Taxol.
The dollar set another six-year high against the mark, rising to an intraday peak of 1.840, and ending at 1.837 marks, up from 1.834 Thursday.
It rose to 0.826 Swiss francs--its highest level since August 1993--before settling at 1.516 against 1.506. Against the Japanese yen, the dollar rose as high as 117.02 in New York, from 116.05 Thursday.
Market Roundup, D4
