A Few Sectors Unscathed in Broad Sell-Off
Tuesday’s stock sell-off was broad and deep, though a few sectors were unscathed.
U.S. government bonds posted their strongest rally in more than two months as a drop in stock indexes worldwide sent many investors scrambling for cover. The benchmark 30-year Treasury yield fell to 6.53%, from 6.61% on Monday.
Meanwhile, gold prices fell sharply from holiday highs after investors began to sell the metal after glitches caused by the Y2K computer bug failed to materialize, dealers said. Gold settled at $282.70, down $5.80 an ounce.
Among the equity highlights:
* Drug stocks slumped on concern that President Clinton might propose measures to regulate drug prices in his State of the Union address at the end of the month. Schering-Plough fell $2.81 to $38, Bristol-Myers Squibb dropped $4.88 to $59.56 and Pfizer slid $1.19 to $30.69. The Amex pharmaceutical index is down 14% since the end of November, while the Standard & Poor’s 500 is up 1%.
* Heightened fears of higher interest rates clobbered the financial group, with American Express losing $5.94 to $151.31, J.P. Morgan off $6.06 to $115.38, Washington Mutual down $1.25 to $24, Citigroup skidding $3.25 to $49.75 and Fannie Mae slipping $1.31 to $57.63.
* The tech decline dragged down many of last year’s hottest names as investors collected profits. CMGI fell $32.69 to $293.75, Qualcomm lost $17.25 to $162.06 and Yahoo sagged $32 to $443 after an early surge. Hewlett-Packard was among the Dow’s biggest decliners, dropping $8.88 to $108.56.
* Oracle tumbled $10.44 to $107.69 after senior executives, including its president, filed to sell more than $112 million of stock in the world’s biggest database software maker. The stock had rocketed from its 52-week low of $21 in April.
* FreeMarkets plummeted $63.38 to $278.50 after General Motors said it will end its contract with the online auctioneer and shift its business to rival Commerce One in 90 days. Commerce One rose $14.88 to $218.50.
* Genesis Microchip lost $5.44 to $16.75 after saying it expects break-even earnings for the latest quarter. Analysts had expected profit of 16 cents a share.
* Bucking the market’s down trend, Walt Disney rallied $1.75 to an eight-month high of $31.63 after an upgrade from Morgan Stanley Dean Witter. Analyst Richard Bilotti said he expects Disney to post higher-than-expected profit this fiscal year because of better results at its TV, film and entertainment parks businesses. The Burbank company’s shares, which slumped 2.5% in 1999, have climbed 35% since hitting a 52-week low of $23.38 on Oct. 18.
* Utility stocks also rose as brokerages such as A.G. Edwards pointed to their “steady and predictable” performance in a suddenly rocky market. Duke Energy climbed 75 cents to $49, PG&E; gained 88 cents to $20.69 and Consolidated Edison advanced 44 cents to $34.19.
* Liquid Audio surged $5 to $31.13 after America Online said it will offer the company’s catalog of digital music through AOL’s online music services. AOL dived $6 to $77.
* Alliant Techsystems, General Dynamics and Northrop Grumman gained after a Merrill Lynch analyst raised his ratings on the defense electronics companies, citing broader U.S. military spending. Alliant rose $3.50 to $65, General Dynamics climbed $2.06 to $51.31 and Northrop rallied 69 cents to $53.56.
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Market Roundup, C7
