Stocks Mixed as Oil Jumps; Techs Ignore Big Merger
U.S. stocks ended mixed but mostly lower Monday, as oil prices surged and jittery traders awaited the latest news from the embattled White House.
Meanwhile, the tech stock sector showed no great reaction to news of a surprise merger between Compaq and Digital Equipment.
The Dow Jones industrial average added 12.20 points to 7,712.94, but most broader indexes fell. Losers outnumbered winners by 15 to 13 on the New York Stock Exchange and by 26 to 16 on Nasdaq.
The Nasdaq composite index, heavy with tech shares, fell 14.47 points, or 1%, to 1,561.46.
Stocks in Asia and Europe generally rallied Monday, with Tokyo’s main average closing above 17,000 for the first time this year, as traders became more convinced that the government is seriously considering steps to prop up the ailing economy.
But on Wall Street, investors still seemed uneasy over the sexual-impropriety allegations against President Clinton.
A forceful denial by Clinton on Monday, however, seemed to help rally the dollar. It rose 1.28 Japanese yen to 126.85 yen in New York.
And bond yields fell back after surging Friday. The 30-year Treasury bond yield dropped to 5.89% from 5.97%.
Rebounding oil prices may have undercut the stock market. Crude oil surged 7%, its biggest rally since June 1996, after the White House said it’s considering a military strike against Iraq.
Near-term crude oil futures in New York rose $1.08 to $16.82 a barrel. Oil has been trading near four-year lows.
Among Monday’s highlights:
* AT&T; fell $3.81 to $61.69 as its new chief laid out his plan for the company’s future, including deep cost cuts.
Signs that companies such as AT&T; are relying on cost cuts to pad earnings led some investors to conclude that the surge in profitability over the last four years may be coming to an end.
That view deepened with Nabisco Holdings’ warning that earnings growth will be hard to achieve this year, in part because of weakness overseas. The food giant’s shares plunged $5.75 to $39.
* Oil stocks rose with crude prices. Exxon gained $1.19 to $60.25, Chevron rose $1.56 to $75.56 and Schlumberger rose $2 to $72.25.
* Stocks rallying on deal news included Digital Equipment, up $10 to $55.44 after Compaq said it will buy the company. Compaq fell $2.75 to $29.
Most tech shares failed to get a lift from the news. IBM fell $1.06 to $98.13, while Adobe Systems lost 88 cents to $37.38 and Micron Technology fell 94 cents to $31.13. The Morgan Stanley high-tech stock index dropped 1.7% for the day.
But Microsoft rallied $3.50 to $141.75 after saying it will split its stock 2-for-1.
* United Technologies jumped $3.63 to $78.31 as it continued to ride the benefits of a strong earnings report last week.
* Some banks gained as South Korea and its international creditors closed in on a debt agreement. BankAmerica rose $1.13 to $65.31, Citicorp rose 94 cents to $114.06 and Bank of New York rose $1.38 to $55.25.
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Market Roundup, D14
