Dow Off 78 in Broad Decline; Bond Yields Slip
Profit-takers grabbed control of Wall Street for a second straight session on Friday, sending stocks broadly lower.
The Dow industrials fell 78.71 points, or 0.9%, to 9,064.62, after losing 33.39 points on Thursday.
The Dow was off as much as 123 points Friday before rebounding.
The Nasdaq composite, which slid 1.9% on Thursday after hitting a record on Wednesday, declined 0.7% to 1,868.96 on Friday. It, too, rebounded from deeper losses.
Losers topped winners by 21 to 9 on the Big Board and by 25 to 17 on Nasdaq, in active but not extraordinary trading volume.
Analysts said there was no specific trigger for Friday’s decline other than a desire on the part of some investors to lock in some of this year’s heady gains.
First-quarter corporate earnings reports have generally been above expectations, helping buoy the market. But Douglas Cliggott, J.P. Morgan Securities’ chief investment strategist, on Friday advised clients to trim their stock holdings, saying earnings gains for many firms in the first quarter can’t justify their current share prices.
“We don’t think the wonderful bull market is over, but we think we’re in for a pause,” he said.
Experts also noted that a growing number of Federal Reserve officials have been warning that the central bank is concerned about the U.S. economy’s still robust growth and the potential for higher inflation. A big risk for stocks is that the Fed could tighten credit this summer.
The Dow utility stock index fell 3.3% for the week, while gold’s price rose $5.30 to $312.90 an ounce. Also, the 30-year Treasury bond yield, while easing Friday to 5.94% from 5.98% on Thursday, rose 0.07 points for the week. All three trends suggest concern about higher inflation and rates.
Among Friday’s highlights:
* The Dow’s slide came despite a huge gain in Hewlett-Packard shares, which soared $8--the equivalent of more than 30 Dow points--to $74.63 after Prudential Securities recommended it.
On the downside, Merck fell $3.88 to $116.50, Sears lost $1.81 to $57.56 and Disney fell $1.56 to $122.13.
* Microsoft fell further, losing $2.38 to $92.13 after diving $4.38 on Thursday after warning of weak sales growth ahead.
* Impotence drug companies rose. Vivus rallied $1.25 to $12.75 on optimism that some men will turn to its impotence treatment because Pfizer’s Viagra won’t work for them. Pfizer gained $2.88 to $118.25.
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Market Roundup, D4
