Blue Chips Dip Again on Profit-Taking
Blue-chip stocks suffered only modest losses Wednesday, weathering continued profit-taking despite bad news from Boeing and Sears.
The Dow Jones industrial average fell as much as 178 points, but closed just 69 points lower at 9,064.54, rebounding from a slide below 9,000 for the second day in a row.
Broader stock indicators posted smaller losses than the Dow, which now sits about 300 points below the record of 9,374.27 set Nov. 23.
Most of this week’s loss came from Monday’s 216-point plunge, since Tuesday’s late rebound left the Dow about 17 points higher on the day.
But even with the late spurts of buying seen the last two days, this week’s declines represent the first enduring bout of profit-taking since the market’s dramatic turnaround began Oct. 8.
“Stocks have had a tremendous run of late, so investors are looking for any bad news as an excuse to sell,” said Uri Landesman, a money manager with J.P. Morgan Investment Management.
The Standard & Poor’s 500-stock index fell 4.03 points to 1,171.25, and the technology-heavy Nasdaq composite index fell 8.54 points to 1,995.21, after surging 54 points on Tuesday. The Russell 2,000 index of smaller companies fell 1.25 points to 397.49.
U.S. bond prices rose for a sixth session, the longest winning streak in more than a year, as investors sought the safety of Treasury issues. The benchmark 30-year bond yield fell to 5.02%, from 5.04% on Tuesday. Yields on two-year notes, among the most actively traded Treasuries, fell to 4.34%.
The dollar fell for a third day against the Japanese yen and German mark. The U.S. currency dropped to 119.93 yen from 122.17 and to 1.6717 marks from 1.6846.
Declining issues outnumbered advancers by a 9-7 ratio on the New York Stock Exchange, while Nasdaq gainers trailed by a 6-5 ratio. Volume of all NYSE-listed shares totaled 887.72 million, down from a hefty 960.08 million on Tuesday.
Among Wednesday’s highlights:
* Boeing fell $6.69 to $33.69, after the latest in a series of profit warnings issued over the last year by the struggling aircraft maker.
The news may have contributed to a steep drop by United Technologies, another Dow component and the maker of engines used on many Boeing jets. The stock fell $4.81 to $101.63, and combined, the two companies sliced the equivalent of 46 points off the Dow.
The jet maker’s other suppliers also fell. Northrop Grumman dropped $3.81 to $77.38, Sundstrand lost $4.38 to $50.44, and Crane declined $4.13 to $27.50.
* Irvine Apartment Communities rose $4.19 to $31.56, after billionaire real estate developer Donald Bren offered to buy the shares of the real estate investment trust that he doesn’t already own for $540 million in cash.
* Drug and biotechnology stocks rose, led by Amgen, up $2.50 to $79.13, American Home Products, up $1.19 to $53.94, and Cor Therapeutics, up $1.19 to $13.13.
* The Dow was also weighed down by Sears, which fell $1.56 to $43 after reporting weak November sales and reducing its profit forecast.
* Among the leading Nasdaq technology names, Sun Microsystems fell $5.81 to $74.13 after a downgrade from Salomon Smith Barney, and Microsoft fell $2.75 to $126.75.
Overseas, Japan’s Nikkei stock average rose 1%, Germany’s DAX index fell 1.9%, Britain’s FTSE-100 fell 0.5%, and France’s CAC-40 fell 1%.
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Market Roundup, C8
