Asia, Clinton Worries Hit Dow, Bonds
U.S. stocks fell for a third straight session Friday, as the dollar tumbled, bond yields surged and gold jumped, amid continuing nervousness over President Clinton’s new woes, corporate earnings and Asia’s troubles.
Financial markets drew no strength from another decline in crude oil prices, which ordinarily would be bullish.
On Wall Street the Dow Jones industrial average lost 30.14 points to 7,700.74, for a net three-day decline of 172 points--all since new allegations of sexual impropriety by Clinton surfaced on Wednesday.
For the week, however, the Dow lost just 53 points. It had surged 119 points on Tuesday.
In the broad market on Friday losers topped winners by 1,876 to 1,107 on the New York Stock Exchange. For the week 1,856 stocks fell on the NYSE while 1,396 rose.
The Nasdaq composite index eased just 0.58 points to 1,575.93 on Friday. It still rose 0.8% for the week, while the Dow lost 0.7%.
The market’s losses in the last three days of the week reflected in part investors’ concerns about Clinton’s political future, analysts said.
“The market hates uncertainty,” said Alfred E. Goldman, director of market analysis at A.G. Edwards & Sons Inc. in St. Louis. “When the word ‘impeachment’ is used, investors worry about what that will mean for the economy.”
Mixed fourth-quarter corporate earnings reports during the week also gave investors pause. Companies such as J.P. Morgan and IBM warned investors that slumping Asian economies will curb profit growth in the first quarter.
With fears growing that corporate earnings gains overall will continue to slow, “So many stocks are carrying a much greater degree of risk than reward right now,” said Cummins Catherwood, a managing director at Rutherford, Brown & Catherwood in Philadelphia.
Meanwhile, the bond market was rattled by a sharp drop in the dollar against the Japanese yen and German mark. The dollar suffered as some foreign investors grew more concerned about U.S. political stability in the wake of Clinton’s troubles, analysts said.
Also, a senior member of Japan’s ruling party said the government will unveil plans Feb. 20 to boost the economy. That could be bullish for the yen. The dollar fell to a two-month low of 125.57 yen in New York from 127.23 Thursday, and it dropped to a four-week low of 1.773 marks.
The sinking dollar helped send bond yields higher. The yield on the 30-year Treasury bond jumped to a five-week-high of 5.97% from 5.87% Thursday.
“Weakness in the dollar is a clue for foreign investors to sell our market and bring money home,” said Neil Toth, who manages about $22 billion in bonds for the Ohio Public Employees Retirement System in Columbus.
Elsewhere, in commodity markets, near-term gold futures leaped $9.10 to $299.90, in the biggest one-day rally since 1990. Traders said the weak dollar helped fuel gold purchases by foreigners.
But crude oil futures in New York lost 30 cents to $15.74 a barrel, the first close below $16 in nearly four years, amid forecasts for weaker-than-expected winter demand even as supplies balloon.
Among Friday’s highlights:
* Energy stocks continued to weaken, with Mobil down $1.81 to $66.50, Chevron off $1.44 to $74 and Western Atlas down $1.19 to $59.38.
* Bank stocks also fell further. J.P. Morgan dropped $3.44 to $99.44, First Chicago NBD lost $2.25 to $72.50 and BankAmerica fell $1.63 to $64.19.
* Airline stocks were hit by profit-taking. AMR, parent of American, fell $4.56 to $124.94. US Airways fell $4 to $57.
* On the plus side, Gateway 2000 jumped $3.13 to $37.13 after the maker of personal computers hired a top AT&T; Corp. executive as its president and reported unexpectedly strong fourth-quarter earnings.
Other tech winners included Compaq, up 63 cents to $31.75, and Dell Computer, up $2.31 to $94.81.
* Gold stocks surged with the metal. Newmont Gold jumped $3.19 to $30.63 while Barrick Gold rose $1.44 to $19.06.
Market Roundup, D4
