P&G; Trips Dow; Broad Market Eases
Procter & Gamble dropped another bomb on its shareholders Thursday, but the damage to the rest of the market was fairly minimal, ahead of a key economic report due today.
Struggling P&G;, one of the 30 Dow industrial stocks, slid $4.38 to $57.50 after the firm dismissed its chief executive and warned of weaker earnings. That helped pull the Dow down 144.14 points, or 1.3%, to 10,668.72.
But most other major indexes fell less sharply. The Standard & Poor’s 500 lost 0.7%; the Russell 2,000 small-stock index fell 0.4%.
The Nasdaq composite, meanwhile, eased just 13.70 points, or 0.4%, to 3,825.56, amid strength in some major tech and telecom shares.
Losers had a modest edge over winners on Nasdaq and on the New York Stock Exchange, as volume slowed again.
Bond yields were little changed, as traders awaited the government’s report today on May wholesale inflation.
That report may provide another clue as to whether the Federal Reserve may soon be finished tightening credit to slow the economy and keep inflation at bay.
Neither U.S. bonds nor stocks seem riled by Thursday’s surprise half-point increase in the European Central Bank’s key rate. But higher European rates may have weighed on U.S. bank and brokerage stocks, which were generally lower.
Among Thursday’s highlights:
* P&G;, which cited competitive pressures as a reason for its latest earnings shortfall, saw its shares fall as low as $55.88 before rebounding somewhat in late trading. Among other consumer-products firms, Gillette lost 75 cents to $34.13, Clorox fell 63 cents to $41.19 and Alberto-Culver lost 94 cents to $25.81.
* Microsoft fell $1.69 to $68.81 in the first official trading since a federal judge late Wednesday ordered the company broken into two firms. The stock had traded as high as $72.13 before falling back.
Shares of Microsoft’s major competitors were mixed. Apple lost $1.75 to $94.81 and Sun Microsystems fell 81 cents to $87.50.
But among other major techs, Oracle rose $2.38 to $82.38. Gateway added $1.50 to $56, Cisco Systems edged up 81 cents to $63.69 and Agilent rose $2.13 to $69.13.
* Some semiconductor-related stocks were strong, including Vitesse, up $3.75 to $68.06; LSI Logic, up $1.44 to $62.88; Micron Technology, up $4 to $80.75; and Broadcom, up $6.88 to $163.38.
* Electronic Data Systems, the No. 2 U.S. computer services company, sank $5.38 to $57.81 after Merrill Lynch analyst Stephen McClellan cut his prediction for second-quarter revenue growth and reduced his share-price forecast.
But rival Computer Sciences gained 44 cents to $95.31.
* In the telecom sector, Qualcomm continued to rebound, gaining $2.75 to $77.44. Other winners included ADC Telecom, up $6.19 to $76.50, and Ciena, up $3.69 to $135.13.
But AT&T; slid $1.88 to $35.25 after the company backed off from a plan to increase long-distance rates. Federal regulators had harshly criticized AT&T;’s plan, noting that the company recently promised to reduce monthly phone bills.
* Sellers again hit retailer Circuit City, which fell 88 cents to $37.44, in the wake of its announcement early this week of disappointing May sales. The retail sector in general was weak.
Market Roundup, C7-8
