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FINANCIAL MARKETS

Dow Index Makes It Seven Straight--but Just Barely

February 14, 1996|From Times Staff and Wire Reports

The Dow Jones industrial average eked out its seventh straight record finish Tuesday, but the market overall ended mostly lower in mild profit taking.

The Dow, which cracked the 5,600 mark for the first time Monday, ended up 1.08 points at 5,601.23 on Tuesday after a roller-coaster session.

In the broad market, losers outnumbered winners by 1,226 to 1,090 on the New York Stock Exchange. The damage was more widespread in the Nasdaq market, where technology stocks took a fresh tumble after Monday's report of a steep dive in semiconductor industry orders in January.

Still, many stocks closed well above their lows for the day, even in the tech sector. Semiconductor leader Intel, for example, fell as low as 56 but ended at 57 1/8, down 1 7/64.

The Nasdaq composite index fell more than 15 points early in the day but rebounded to end with a loss of 8.16 points at 1,087.22.

For the resilient Dow, meanwhile, the seventh straight record high almost didn't happen: Blue-chip shares were hit by renewed selling in the final hour, only to rally in the closing minutes.

This is now the longest winning streak for the Dow since a nine-session streak in January 1987.

Robert Stovall, president of Stovall/21st in New York, predicted a pause for the market that could last several days and which might bring the Dow index down 100 to 200 points.

But even a 200-point decline today would pare just 3.6% off the Dow. It has surged 9.5% so far this year.

At the Dow's current heights, analysts say, investors will have to get used to the fact that big point moves aren't as significant as they were at lower Dow levels.

Elsewhere Tuesday, the bond market was calm in the face of mixed economic data.

A report from the Federal Reserve Bank of Atlanta showed that business conditions in the Southeast were still weak in January. Also, the Labor Department said U.S. wages and benefits in 1995 rose at the slowest pace in at least 13 years--a disinflationary report that is good for bonds.

Although two additional reports showed that national retail sales rose last week--hinting at an economic pickup--the figures may have been skewed by the effects of cold weather in prior weeks.

The yield on the benchmark 30-year Treasury bond ended unchanged at 6.03%.

Among Tuesday's highlights:

* In the tech sector, Compaq lost 1 1/4 to 50, Hewlett-Packard dropped 2 to 88 3/8, IBM was off 1 5/8 to 113 5/8, Texas Instruments fell 1 1/8 to 50 7/8 and BMC Software was down 2 1/2 to 55 1/2.

Also, Montreal-based Discreet Logic plummeted 12 1/2 to 11 1/4. The company, which writes programs that help film studios create special effects with powerful computers, said its near-term earnings will be below expectations. Also, David Macrae resigned as president and chief executive.

On the upside, computer chip maker Micron Technology added 3/4 to 37 3/4 after falling as low as 35 3/4. Also, semiconductor manufacturing-equipment maker Applied Materials dropped 1 5/8 to 38 3/8, but in after-hours trading the stock surged 3 1/8 after the company reported quarterly earnings that were above analysts' estimates.

* Oil stocks were up as crude prices surged. In New York, March futures jumped 94 cents to $18.91 a barrel, the highest since Jan. 19.

Analysts said colder weather in the United States and Europe, and fading expectations that Iraqi oil will be back on the market any time soon, helped propel prices on expectations of shrinking supplies.

Atlantic Richfield rose 1 3/4 to 118 7/8, Chevron gained 1/2 to 56 1/8, Mobil added 5/8 to 116 1/4 and Royal Dutch jumped 2 5/8 to 148 1/4.

Natural gas prices also took off, following an industry report that showed gas held in storage at just 31% of year-ago levels.

* Cigna rose 3 to 121 5/8 after the company reported fourth-quarter earnings ahead of analysts' estimates, and after a judge allowed the company's restructuring plan to proceed. Other insurance stocks rising included Aetna, up 1 1/2 to 74 1/8; Chubb, up 1 1/4 to 103; and SunAmerica, up 1 to 52.

* Among blue chips, McDonald's fell 1 1/2 to 52 5/8 after Bear, Stearns & Co. downgraded the stock. International Paper lost 3/4 to 39 3/4 after the company said it would take a $500-million charge against first-quarter earnings for the cost of closing several plants.

But United Technologies jumped 2 7/8 to 105 3/4. The conglomerate said it will use its free cash to acquire companies and buy back shares during the next two years, the Wall Street Journal reported.

* Teledyne rose 1 to 28 after investment banker Ronald LaBow sweetened his acquisition offer to $1.67 billion, or $30 a share. His WHX, which would be involved in the deal, fell 1 1/4 to 11 7/8.

* Jenny Craig was unchanged at 9 1/4. But after the market closed the Del Mar firm said it will commence a Dutch auction tender offer to repurchase up to 3 million shares, about 12.4% of its stock.

In foreign trading, Mexico's Bolsa stock index slid for the third straight session, losing 29.85 points to 2,920.72.

After the market closed, the Mexican government reported that interest rates rose at this week's auction of cetes, or treasury bills. The 28-day cetes rate rose to 39.57% from 36.22% a week ago. Analysts had feared higher rates because of recent weakness in the peso.

In U.S. commodities trading, copper prices fell sharply for the second consecutive session, with news of a substantial increase in warehouse inventories contributing to the losses.

March copper futures declined 2.40 cents to $1.13 a pound at the Comex.

Meanwhile, gold managed to halt its recent decline. February futures rose $1.80 to $403 an ounce on the Comex. Silver also gained, with February futures up 4.9 cents to $5.71 an ounce.

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