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DuPont, Sears Pressure Dow as Techs Rise

July 10, 1998|From Times Wire Services

NEW YORK — Technology shares led the Nasdaq market to another record Thursday, but most stocks fell, with a profit warning by DuPont and a weak sales report by Sears, Roebuck halting the Dow's bid for new highs.

The dollar rose against the yen amid growing skepticism that Japan would take sufficient measures to stimulate its economy despite pledges of tax reform. Bond yields were mostly lower.

The Dow Jones industrial average fell 85.19 points to 9,089.78, nearly wiping out Wednesday's 89-point climb to the highest level since the index peaked at 9,211.84 on May 13.

Declining issues outnumbered advancers by a 7-5 margin on the New York Stock Exchange, where composite volume totaled 663.61 million shares, up from 607.23 million on Wednesday.

DuPont sank $7 to $70.13 after the biochemical company said that its second-quarter results won't meet Wall Street forecasts.

The warning overshadowed a solid second-quarter report from General Electric, which rose 81 cents to $94.13, and weighed down other stocks that, like DuPont, are considered most vulnerable to economic swings.

Analysts cut their forecasts on second-quarter profit growth for S&P 500 companies to 1.7% from 2.3% last week and 3.6% the week before that, according to First Call Corp. Profits rose 11% in the second quarter of 1997.

Mostly however, DuPont's announcement provided an excuse to lock in gains from the market's rally, analysts said.

The market made "a substantial run in a short period of time and was a little overbought," said Bill Meehan, chief market analyst at Cantor Fitzgerald.

"The S&P 500 has gained better than 8% since June 15," when the market bottomed, he said, asserting that DuPont was also ripe for profit-taking. "DuPont was in the low 50s when we began the year."

Most broad-market indicators also surrendered a chunk of Wednesday's gain, but the Nasdaq composite index rose 4.43 points to 1,939.82, setting a new high for a second day.

The NYSE composite index fell 4.12 points from Wednesday's closing record, finishing at 590.23.

In the bond market, the price of the key 30-year U.S. Treasury bond rose, pushing its yield down to 5.60% from 5.63% at Wednesday's close.

Among Thursday's highlights:

* Oil shares declined. Burlington Resources reported earnings that fell below analysts' expectations because of lower crude prices. Analysts said the disappointing results may portend trouble for the industry. Burlington fell $1.44 to $41.06, Exxon fell $1.44 to $71.75 and Chevron lost $2.19 to $81.

* Internet stocks declined for a third day, even after Yahoo reported higher-than-expected second-quarter profit of $8.1 million. The leading Internet directory, which has a market capitalization of $9 billion and an estimated 40 million users, rose nearly $18 before closing $2.19 lower to $184.

Excite also lost early gains, falling $9.13 to $82.25, Lycos fell $6.56 to $70.94. Only Netgravity managed to stay up. The provider of software for managing online advertising, which went public last month at $9, gained $2.88 to $24.88.

In currency trading, the dollar jumped about 2 yen, extending the previous session's rise before easing as it became clearer that permanent Japanese income-tax cuts would not be forthcoming.In late trading, the dollar was higher at 141.10 yen, compared with 139.27 Wednesday.

At the Comex in New York, bearish speculators and trade houses pushed copper to its lowest price since June 1987, before the market steadied. Copper for delivery in September closed 0.40 cent a pound lower at 71.80 cents.

*

Market Roundup, D6

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