Broad Market Ends Lower on Volatile Day; Bond Yields Dip
Stocks closed broadly lower Thursday, though key indexes bounced back from deep losses, as Wall Street was battered by a number of crosscurrents--and the winds of Hurricane Floyd.
The Dow Jones industrial average, at one point down 174 points, recovered to close at 10,737.46, a loss of 63.96 points
The Nasdaq composite’s reversal was even more dramatic. It was down 2.1% at its low but closed off just 0.3%.
Still, losers swamped winners by 21 to 9 on the New York Stock Exchange and by 25 to 13 on Nasdaq.
Volume was modest, as many traders fled Wall Street ahead of Floyd’s torrential rains.
What’s more, today is a “triple witching” session, a once-a-quarter event when contracts on stock options, index options and index futures all expire. As traders close out market bets, it can make for volatile trading--which was probably a factor Thursday, experts said.
While the stock market kept normal hours Thursday, the bond market closed early. Treasury yields ended slightly lower. The 30-year T-bond closed at 6.07%, down from 6.10% on Wednesday.
Bonds were helped as the dollar halted its steep dive against the yen, at least for now. The dollar rose to 105.19 yen from 104.23, a 44-month low.
After the Tokyo stock market dived 2.7% on Thursday, Japanese leaders issued strong warnings that a continued strengthening of the yen against the U.S. dollar could jeopardize the nation’s budding economic recovery, and Prime Minister Keizo Obuchi told reporters that Japan would consider intervention.
In commodity trading, oil prices continued to climb, with near-term crude futures in New York rising 38 cents to $24.51 a barrel, a new 2 1/2-year high.
Rising fuel prices are cutting into some companies’ earnings: FDX, parent of Federal Express, stunned investors by reporting weaker-than-expected quarterly earnings, in part because of higher fuel costs. The stock plummeted $5.44 to $38.25, helping drag the Dow transportation index down 3.3%, its lowest since December.
Among Thursday’s highlights:
* Other companies warning about earnings included Raytheon, whose Class A shares sank $7.25 to $53.50 after the defense contractor said near-term results will suffer from restructuring charges.
Also falling in the defense sector were General Dynamics, down $2.19 to $61.19, and Northrop Grumman, down $2.13 to $65.69.
But Comsat rocketed $7.50 to $35 after Lockheed Martin got federal approval for the first stage of its takeover of Comsat. Lockheed lost $1.31 to $33.69.
* Align-Rite soared $4.75 to $19.50. The Los Angeles-based maker of photomasks for the semiconductor industry agreed to merge with rival Photronics of Jupiter, Fla. Align-Rite owners will get the equivalent of $23.09 per share in Photronics stock. Photronics jumped $1.38 to $25.63.
* Some new Internet issues got good receptions on their first trading day, including Garden.com, up $7.06 to $19.06, and Luminant, up $8.38 to $26.38.
Other Net stocks were mixed. America Online lost $1.31 to $87.56, its lowest price since Aug. 10.
* Tech stocks rode a roller-coaster. Microsoft fell as low as $90.63 but closed up $1.38 at $94. Apple rose $1.44 to $76.81 after falling to $73.88.
But Hewlett-Packard ended down $4.56 at $103.94.
* Nike rose 56 cents to $54.75 in late trading after reporting quarterly earnings up 22%, beating expectations.
* Blue chips gaining ground in an otherwise down market included Time Warner, up $3.25 to $61.75; GE, up $1.25 to $117.25; and Merck, up $1.38 to $69.44.
* Bestfoods slid $1.63 to $51.50 after it denied it was in merger talks with Heinz. Heinz eased 13 cents to $44.50.
Market Roundup, C10
