U.S. Stocks Dip; Argentina Rebounds

<i> From Times Staff and Wire Reports</i>

Stocks were broadly but modestly lower Tuesday as the avalanche of second-quarter earnings reports began on Wall Street.

Meanwhile, in Latin America, markets recovered some of Monday’s steep losses as a presidential candidate in Argentina denied that he would seek a moratorium on debt repayment.

The Dow Jones industrials ended the day off 25.96 points to close at 11,175.02, and most broader indexes also declined.

The Nasdaq composite gave up 0.4%, and the Standard & Poor’s small-stock index eased 0.3%.


Losers outnumbered winners by 17 to 13 on the New York Stock Exchange.

The Dow had been off as much as 114 points before recovering.

Strong earnings reports helped boost such shares as brokerage Merrill Lynch, up $1.38 to $79.25; biotech giant Amgen, up $6 to $72.31; and mortgage leader Fannie Mae, up 31 cents to $68.13.

But “the good news of the earnings season is being overshadowed by concerns about Latin America,” said Marshall Acuff, equity strategist at Salomon Smith Barney.


Argentina is suffering from rising political strife as the country heads toward an October presidential election. On Monday, candidate Eduardo Duhalde suggested that he might seek a moratorium on debt payments for the struggling economy.

That sent the main Argentine share index down 8.7%. But on Tuesday the index rebounded 4.6% to close at 474.71 after Duhalde backtracked, and as Wall Street firms Lehman Bros. and Salomon Smith Barney told clients the country would weather a financial crisis.

“Duhalde hasn’t asked for the forgiveness of the debt; Duhalde isn’t going to ask for a one-year grace period,” the candidate said, referring to himself in the third person.

The Brazilian stock market edged up 0.3%, while Mexico’s market jumped 1.3%.

U.S. Treasury bond yields, which had tumbled Monday amid a modest “flight to quality” by nervous investors, were marginally lower or unchanged Tuesday.

The bellwether 30-year T-bond’s yield ended at a six-week low of 5.89%, down from 5.90%.

Bonds attracted traders who are wagering that a government report due today on June wholesale inflation, and another due Thursday on June consumer inflation, will show tame numbers.

Economists surveyed by Bloomberg News expect, on average, a 0.1% rise in both wholesale prices and consumer prices in June from May.


For stocks, the major focus will remain quarterly earnings.

Companies in the S&P; 500 are expected to post close to 15% growth in second-quarter profit from operations, on average, according to First Call’s analyst survey. That would be the biggest profit jump since third-quarter 1997.

Among Tuesday’s highlights:

* Major bank stocks continued to slide, which traders said partly reflected fears about potential Latin American debt problems.

Citigroup fell $1.06 to $47.69, Chase Manhattan dropped $1.31 to $82.81, J.P. Morgan fell $2.31 to $138.25, and BankBoston lost $1.19 to $48.63.

* In the brokerage sector, Jefferies Group surged $1.19 to $26.88 after its earnings hit a record.

* Many biotech stocks rallied with Amgen. Biogen rose $2.19 to $66.75, Imclone Systems leaped $2.38 to $30, Vical gained $1.25 to $14.38, and Immunex was up $3.50 to $115.75.

* Among Dow stocks, International Paper eased 50 cents to $53 despite reporting slightly better-than-expected earnings.


But Procter & Gamble rose $1.94 to $88.94 after raising its dividend 12%.

* Tech stocks were mixed ahead of Intel’s earnings report, released after trading ended. Microsoft slipped 56 cents to $93.63, and Dell was off $1.38 to $42.25, but Micron Technology surged $3 to $54.19.

* Health Management Associates dove $3.31 to $8 in heavy trading after the operator of rural and suburban hospitals warned it will miss analysts’ earnings estimates.

Market Roundup, C9