Dow Slides 127 as Rate Jitters Rise
Dow 10,000 became a more distant memory on Wednesday, as blue chips ended the first quarter with a sell-off.
The broad market also was lower--and in heavy trading--as investors focused on the possibility of higher interest rates amid a global economic recovery.
The Dow industrials tumbled 127.10 points, or 1.3%, to close at 9,786.16 in a decline that accelerated late in the day.
The index had opened higher, climbing 88.80 points to 10,002.34 in the first hour. But heavy selling in Philip Morris and Coca-Cola hammered the Dow later.
Broader stock indicators also faded in the final hour as technology shares trimmed early gains.
Still, the Nasdaq composite ended down 0.8%, much less than the Dow. And the Standard & Poor’s small-stock index, severely pummeled in the quarter, eased just 0.5% Wednesday.
Yields jumped in the bond market, worrying some stock players, as a report on Midwest manufacturing raised concern that brisk economic growth will quicken inflation later in 1999.
A survey of manufacturing executives in the Chicago area showed that an index of prices paid by companies for supplies in March surged to 52.5 from 41.6--the largest monthly increase since 1980.
Bond traders worried that the report may presage a strong reading in a national such index today, fanning inflationary worries.
That sent bond yields up: The 30-year Treasury bond yield rose to 5.62% from 5.58% on Tuesday.
“Inflation is an issue for the first time this year,” said John Breazeale, who oversees $250 million at Weiss Money Management in Palm Beach Gardens, Fla.
Just how concerned stock traders were about that on Wednesday is debatable, though. The pickup in volume--more than 930 million shares changed hands on the New York Stock Exchange--may have been related to quarter-end portfolio shuffling.
Investors are “just tired, tired, tired,” after pushing the Dow index to its first close above 10,000 on Monday, said Bryan Piskorowski, analyst at Prudential Securities.
The stock market will be closed Friday for Good Friday.
Among Wednesday’s highlights:
* Philip Morris dropped $2.56 to $35.19, with other tobacco stocks also retreating, after an Oregon jury ordered the cigarette maker to pay $80 million to the family of a man who died of lung cancer.
Consumer stocks in general were lower. Coca-Cola, still reeling from a warning of lower sales on Tuesday, lost $1.88 to $61.38.
* Bank and utility stocks were weak as interest rates rose. The Dow utilities index fell 0.6%.
* Tech stocks were mixed, with Dell gaining $1 to $40.88 while Intel slid $2.69 to $118.88.
Computer workstation maker Silicon Graphics rose $2.31 to $16.56, but warned after the close of trading of a bigger-than-expected quarterly loss.
* Among Southland issues, Ingram Micro soared $3.81 to $22.81, as the largest wholesaler of personal computers was upgraded by an A.G. Edwards analyst. Gemstar leaped $11.38 to $75.25 on rumors it is close to settling a patent-infringement lawsuit with TV Guide.
* IDG Books Worldwide rocketed $7.69 to $24.94, as the publisher of the “For Dummies” series of help books said Running Press Book Publishers’ Miniature Editions unit will sell a line of the popular books small enough to fit in the palm of a person’s hand.
Market Roundup, C8
1st Quarter Leaders, C12
