Dow Tries to Claw Back for a Second Day, but Drops 45
The stock market ended mixed Wednesday after gamely trying to extend its one-day rebound from massive losses in late August.
The day illustrated how stocks still face choppy waters despite their big bounce-back Tuesday, analysts said.
The Dow Jones average of 30 industrials, up more than 100 points earlier in the session, finished with a 45.06-point loss at 7,782.37. Thus, the blue-chip gauge still remains more than 1,550 points, or 16.7%, below its record high reached July 17.
Technology stocks generally fared better as investors continued shopping for big-name bargains following Monday’s drubbing. The technology-laden Nasdaq composite index tacked on 17.76 points, or 1%, to 1,592.85, though that was below its best levels of the day as well.
Indeed, computer and Internet stocks were among the day’s big winners, along with banking, brokerage, biotechnology and insurance shares.
Gainers outpaced losers by a modest margin on the New York Stock Exchange.
NYSE volume was a heavy 895 million shares, but that was down from the record high 1.2 billion set Tuesday, when the Dow rebounded 288 points after plummeting 513 points on Monday.
Government bonds were little changed as the yield on the benchmark 30-year Treasury bond inched down to 5.33% from 5.34% late Tuesday. And the U.S. dollar was mixed against other currencies.
The stock market’s mixed scorecard Wednesday wasn’t surprising, given the extreme volatility and global financial problems that have battered Wall Street over the last two weeks, analysts said.
In Moscow, President Clinton used a news conference with Russian President Boris N. Yeltsin to reassure investors.
“The volatility in the world markets, including in our stock market, I think is to be expected under these circumstances,” Clinton said. “The right thing to do is to try to restore growth in the economies of the world where there isn’t enough growth.”
After setting record highs in mid-July, blue-chip stocks have been tumbling in the face of continued economic and political woes overseas.
Smaller stocks, by contrast, had peaked in late April. The Russell 2,000 index of smaller shares was down sharply by the time bigger stocks began to slide in late July.
On Wednesday, the Russell index gained 1.3% to 352.65 points, building on Tuesday’s rebound of 3%. But the index remains down 28.2% from its April 21 record closing high.
In the broad market, Tuesday’s comeback was encouraging, but “we’re still looking some bad news right in the eye” in terms of disappointing corporate profits, and so it “wouldn’t have made sense for us to keep going up in a straight line” after Tuesday’s rally, said Douglas Cliggott, investment strategist at J.P. Morgan Securities in New York.
Tuesday’s gains “didn’t solve a lot of the uncertainty we’re going to confront over the next two or three quarters,” and that’s also why it’s premature to suggest that the market bottomed out on Monday, he said.
“People have been reminded that equities are a risky investment,” Cliggott added.
And now they’re quick to sell--either for quick profits or to pare their recent losses--if a rally starts to falter, which is also why the market failed to hold its earlier gains Wednesday and drifted lower in late trading, analysts said.
The market’s early lift came partly from strength in foreign markets, as blue-chip indexes rose on the biggest European stock markets following gains in Tokyo, Hong Kong and Singapore.
The Nikkei 225 index in Tokyo rose 6.99 points to 14,376.62, while Hong Kong shares jumped 4.2%.
In Europe, London’s Financial Times-Stock Exchange 100-share index gained 66.70 points, or 1.3%, to 5,235.80. Frankfurt’s DAX index surged 3.7% to 4,970.50.
Mexico’s market rebounded by 6.2% despite news that Colombia devalued its currency. Brazil’s main share index lost 1.6%.
Among Wednesday’s U.S. market highlights:
* Yahoo jumped $5.50 to $77.75 after being named to join the index of Nasdaq’s 100 biggest stocks. Other Internet gainers included Amazon.com, up $7.92 to $87.88; America Online, up $3 to $88, and EarthLink Network, up $6.50--or 24%--to $33.25.
* In the computer group, Dell Computer added $1.88 to $110.25; Apple Computer gained $1.44 to $35.56, and International Business Machines rose $2.56 to $120.50.
* Battered bank and financial stocks were mostly higher. American Express rose $1.75 to $83.75 and NationsBank gained $1.81 to $58.75, but J.P. Morgan lost $2.25 to $95.25.
* Comsat climbed $3.63, or 14%, to $29.75 amid mounting speculation that the provider of satellite services is a takeover target.
The dollar fell in late New York trading to 137.50 Japanese yen from 139.25 yen late Tuesday.
*
Times wire services were used in compiling this report.
Market Roundup, D7
