Stocks Mixed, Yields Up Amid Asia Questions
Technology shares posted more record-setting gains, but most stocks fell Monday as prospects for an Asian recovery grew more uncertain with the political upheaval spurred by Sunday’s stunning election in Japan.
The Dow Jones industrial average finished 9.53 points lower at 9,096.21 after meandering through the lackluster session.
U.S. bond prices, meanwhile, posted their biggest drop in nearly a month amid speculation Japan will indeed speed economic changes and Russia will avoid default, reducing the appeal of safer assets such as Treasuries.
The price of the benchmark 30-year Treasury bond fell, raising its yield to 5.69%. On Friday, the long-bond yield stood at 5.62%.
Broad stock market indexes were mixed, with the technology-heavy Nasdaq composite index setting a new high for a fourth straight session despite a profit warning late Friday from Applied Materials.
The Nasdaq composite rose 22.49 points to 1,965.53, pushing this year’s gain to nearly 400 points, or 25%. The highflying index has now surged 250 points, or 14.5%, since bottoming out June 15.
The strength in technology also bolstered the blue-chip Standard & Poor’s 500-stock index, which rose 0.86 point to 1,165.19, near Wednesday’s closing record of 1,166.38.
Declining issues outnumbered advancers by a 9-7 margin on the New York Stock Exchange, where trading was heavy.
The NYSE composite index fell 0.76 point to 591.42, but the Russell 2,000 index of smaller companies rose 0.32 point to 458.75.
Trading was fairly cautious following Sunday’s anemic showing by Japan’s Liberal Democratic Party and the ensuing resignation of Prime Minister Ryutaro Hashimoto.
Investors seemed to pay little attention to solid second-quarter profit reports from Chrysler and NationsBank.
“The outlook for 1999 profits for U.S. companies--but more specifically for the second half of 1999--is just a little bit brighter, particularly for those doing business in Asia,” said Hugh Johnson, chief investment officer at First Albany.
Among Monday’s highlights:
* Despite uncertainty in Asia, key technology stocks continued to enjoy a wave of buying interest. Intel was among the top gainers, rallying $2.63 to $82.38 on expectations its second-quarter earnings will beat Wall Street estimates. Intel is scheduled to report earnings after today’s close.
Dell Computer rose $5.38 to $106.19, Microsoft rose $4.38 to $117.566. Likewise, Hewlett-Packard rose $1.56 to $60.13 and IBM rose 88 cents to $119.38 to cushion the Dow.
But Applied Materials fell 94 cents to $28.56 after Friday’s warning that profit would be lower than expected.
At an industry conference Monday, Applied Materials executives said they don’t expect a recovery in their business until mid-1999, said Donaldson, Lufkin & Jenrette Inc. analyst Robert Maire. Still, the stock declined a relatively modest 3%, and other semiconductor equipment companies barely budged. KLA-Tencor lost 25 cents to $26.81 and LSI Logic gained 63 cents to $24.06.
* General Motors fell $2.31 to $68.88 as the weakest Dow component after weekend talks failed to end strikes at two parts plants that have idled the rest of its North American production.
The Dow was also weighed down again by its energy components, which have been plagued by worries about the earnings impact of the big recent drop in oil prices: Exxon fell $1.19 to $70.50 and Chevron fell $1 to $80.88.
In currency trading, the dollar swung wildly against the yen, soaring 3 yen then falling back 4 yen before rising again on news of Hashimoto’s resignation.
It stood at 141.42 yen, a slight change from Friday’s 140.93 close.
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Market Roundup, D14
