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FINANCIAL MARKETS : Blue-Chips Slide for 3rd Session in Row

March 29, 1994|From Times Wire Services

Blue-chip stocks slid for a third straight session Monday, with weakness in oil and technology stocks jarring a market already skittish over the recent jump in interest rates.

The Dow Jones industrial average ended down 12.38 points at 3,762.35 after recovering from an early setback of more than 46 points to a low for the year of 3,728.96. The index started trading this year at 3,754.09.

In the credit market, the Treasury's key 30-year bond yield fell to 6.97% from Friday's 7.01%. Friday was the first time in 10 months that the long-bond yield had closed above 7%. The long-bond's price, which moves in the opposite direction, rose 15/32 point, or $4.69 per $1,000 in face value.

The closely watched Dow average has fallen more than 106 points since Thursday, as investors worried that a rise in interest rates would cripple the economy. Political worries about the Whitewater affair and tension on the Korean Peninsula also unnerved investors.

In the broader market, declining issues outnumbered advances by about 12 to 5 on New York Stock Exchange volume totaling 287.36 million shares, down from Friday's 249.68 million shares.

There was much weakness among the smaller capitalization issues. The Nasdaq composite index fell 10.95 points to end at 772.50, pressured by weakness in technology stocks.

Among other major market indicators, the Standard & Poors index of 500 stocks fell 0.58 to 460.00, while the NYSE's composite index fell 0.79 to 255.50. At the American Stock Exchange, the market value index fell 6.22 to 462.21.

Analysts said the intra-day recovery in the stock market followed the decline in long-term interest rates from Friday's 10-month high.

Bond prices managed their modest gains Monday despite a sharp decline in commodity prices, which did little to reassure market participants nervous over inflation.

The advance in the fixed-income market was cooled by heightened bearishness ahead of key employment figures due out on the Good Friday holiday, when most U.S. bond markets are closed, analysts said.

Oil stocks tumbled after the Organization of Petroleum Exporting Countries was unable to agree on production cuts to boost oil prices. May crude oil plunged $1.05 to $14.08 a barrel on the New York Mer, nearing its five-year low of less than $14, reached late last year.

Gold prices fell domestically after finishing mixed overseas. On the New York Comex, gold for current delivery closed at $388 an ounce, off $3 from Friday. Silver fell 10.2 cents to $5.679 an ounce.

In the currency market, the dollar rose against most European currencies but fell to its lowest level in more than four months against the lira, which gained after a conservative party emerged as the likely victor in Italian national elections.

Investors similarly ignored higher share prices abroad. Japan's 225-share Nikkei average closed ahead 105.31 points at 19,941.79 points, while in Frankfurt, the DAX 30-share average ended at 2,161.42, up 31.36 points. London's Financial Times 100-share average finished up a fraction.

Mexican stock prices tumbled on investor nervousness over who will be named by the ruling Institutional Revolutionary Party to replace slain presidential candidate Luis Donaldo Colosio. The Bolsa index ended 74.63 points lower at 2,446.15.

Among the market highlights:

* ARCO fell 3 to 98, Chevron lost 1 1/4 to 88 1/4, and Texaco tumbled 1 1/8 to 64 3/4.

* Computer Associates lost 3 1/8 to 32 7/8 on fears that an upcoming mainframe launch by IBM could pressure its mainframe software prices.

* Software stocks were weak, including Microsoft, down 1 1/8 to 86 3/8, and Lotus Development, off 3 to 73 1/4. Among other high-tech stocks, Intel dropped 1 1/8 to 68 5/8, Oracle shed 1 1/8 to 32 1/8, Integrated Development fell 3 1/8 to 27 1/4 and Micron Technology lost 2 7/8 to 82 3/4.

* Grumman jumped 1 5/8 to 64 7/8 after saying it wants a competitive bidding process for the company, which led to speculation of higher bids from suitors Northrop and Martin Marietta. Northrop dropped 1 3/8 to 42 3/4, and Martin Marietta rose 3/4 to 46.

* Many stocks sensitive to the economic cycles also fell sharply on the NYSE, with Caterpillar losing 2 5/8 to 114. Those issues, along with technology stocks, have seen a steady advance in recent months.

Market Roundup, D8

DAILY DIARY / March 28, 1994

Dow Jones Industrials

High: 3,793.45

Close: 3,762.35

Low: 3,719.74

New York Volume: 287.36 million

Interest Rates:

30-year T-Bond: 6.97%

1-year T-Bill: 4.36%

DOW 30: -12.38; 3,762.35

S&P 500: -0.58; 460.00

NYSE: -0.79; 255.50

NASDAQ: -10.95; 772.50

WILSHIRE: -25.587; 4,614.9444

AMEX: -6.22; 462.21

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