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Dow Trims Week's Gains; Broad Indexes Up

September 20, 1997|From Times Wire Services

A weak profit forecast by Union Carbide held back the Dow Jones industrial average, but most stock measures rose Friday as interest rates continued a weeklong drop in the bond market.

The dollar rose against the yen after U.S. officials said they would not step up pressure on Japan to reduce its trade surplus at the Group of Seven meeting today in Hong Kong.

The Dow was off 37 points with a half hour left of trading but closed just 5.45 points lower at 7,917.27, trimming the week's gain at 174.30 points. If not for big drops by Union Carbide and International Paper, the blue-chip barometer would have shown a modest gain for the day.

Broader stock indicators struggled in the morning but turned around midday to extend several record-setting streaks.

The Russell 2,000 index of smaller companies closed at a record high for the sixth consecutive session and for the 15th time in 17 sessions. Also setting new highs were the Nasdaq composite index and the American Stock Exchange composite index.

Once again, stocks drew a boost from the red-hot bond market, which has been rising since Sept. 12's release of some mild inflation data.

As bond prices have risen, the yield on the 30-year Treasury--another key determinant of borrowing costs--has fallen from 6.69% to 6.37%, its lowest level since late July.

With no major economic reports released during the session, trading was dominated by the expiration of futures and options contracts on stocks and stock indexes--a quarterly event known as "triple witching."

Union Carbide fell $4.06 to $49.56 after the chemical maker warned late Thursday that its third-quarter profit won't meet analyst forecasts. The Dow's other big loser was International Paper, which slid $3.13 to $54.94 as investors secured some of this week's gains by that company's shares.

Earlier this week, paper stocks rallied as Georgia-Pacific reported better-than-expected profit amid higher prices. On Friday, Georgia-Pacific fell 44 cents to $101.94.

Nike, Rubbermaid, Antec and Galoob Toys added their names to the list of companies that warned in recent days of weak profits or sales.

Nike fell 56 cents to $54.31. The company said sneakers and sports apparel could fall short of internal sales targets.

Rubbermaid, a maker of plastic housewares, said earnings are likely to be about 35% less than analysts' estimates. The stock rose 63 cents to $26 after the chairman said the fourth quarter would be better.

South San Francisco-based Galoob dropped $1.94 to $15 after it said revenue from action figures from the hit movie "Men in Black" didn't match forecasts.

The dollar rose to 122.28 Japanese yen late in New York from 121.95 yen late Thursday. But it fell to 1.7752 German marks from 1.7795 marks Thursday.

The Standard & Poor's 500-stock list rose 3.22 points to 950.51, moving back within 10 points of its early August peak. The NYSE composite index rose 1.15 points to 496.56, just 0.44 below its Aug. 6 record high.

The Nasdaq composite rose 10.34 points to 1,680.36 for its third record close this week. The Russell 2,000 rose 0.67 to 447.17, and the American Stock Exchange composite index, which is dominated by smaller companies, inched 0.14 higher to 686.94 for its sixth consecutive closing record.

Market Roundup, D4

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