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Nasdaq Sets Record; Broad Market Mixed

July 16, 1998|From Times Wire Services

Technology shares took the Nasdaq market to a sixth straight record Wednesday, but most stocks fell as investors locked in some of Tuesday's big gains.

An early 60-point gain had pushed the Dow Jones industrial average above 9,300 for the first time, but the blue-chip barometer later changed direction and finished with a loss of 11.07 points at 9,234.47.

The Dow, which rose 150 points Tuesday for its first closing record in two months, would have suffered a much steeper loss if not for a huge gain by Eastman Kodak, which beat Wall Street forecasts for its second-quarter profit.

Kodak's shares surged $8.75--or the equivalent of about 35 points on the Dow--to $82.50 in heavy trading. It was the second day in a row that one of the Dow 30 soared on profit news. J.P. Morgan rose $7.56 on Tuesday after the investment bank beat analysts' projections.

Wednesday's broad market was mixed, with smaller-company shares posting a modest gain and the technology-heavy Nasdaq market rising 1.3% despite a seemingly disappointing profit report from Intel.

U.S. bond prices rose, snapping a three-day slide, as the dollar gained against the yen and speculation ebbed that Japan's new leadership will speed steps to end its recession, supporting demand for less risky assets such as U.S. Treasuries.

The yield on the benchmark 30-year Treasury bond edged down to 5.70% from 5.72% on Tuesday.

Like the Dow, the Standard & Poor's 500 gave back a small piece of Tuesday's record-setting gain, but analysts downplayed the significance of Wednesday's stumble.

"On a real short-term basis, the market's a little extended," said Richard A. Dickson, a technical analyst at Scott & Stringfellow in Richmond, Va. "There will be potholes on the way, but it looks like the summer rally is in good shape."

The Nasdaq composite index rose 26.13 points to 1,994.54, extending this year's gain to 27%.

After Tuesday's close, Intel reported a second-quarter profit of $1.2 billion, down 29% from a year ago and slightly below forecasts.

But compared with a few months ago, Intel was noticeably more optimistic about its near-term prospects, and the chip maker's stock jumped $3.56 to $84.25 on Wednesday as the most active Nasdaq issue.

"Looking below the numbers, investors found comfort in the thought that maybe the worst is over for Intel," said Robert Freedman, chief investment officer for the John Hancock Funds in Boston.

The Standard & Poor's 500 fell 2.77 points to 1,174.81 after climbing 12 points Tuesday, setting a new high and pushing this year's gain above 21%.

Declining issues outnumbered advancers by a narrow margin on the New York Stock Exchange, while advancers were more populous in Nasdaq trading.

NYSE trading volume totaled a hefty 879.78 million shares.

The NYSE composite index, which also set a new high on Tuesday, fell 2.12 points to 595.49. The American Stock Exchange composite fell 1.81 points to 730.39.

The Russell 2,000 index of smaller companies rose 2.54 points to 461.97.

Among Wednesday's highlights:

* Not all of the profit news was encouraging. Caterpillar fell $4.25 to $52 after the heavy-equipment maker failed to meet expectations.

Whirlpool, the world's largest appliance maker, fell $5.38 to $63.94. While its profit from continuing operations of $1.05 a diluted share beat forecasts by a penny, investors were discouraged by slow sales in Brazil.

Drug makers fell after soaring in recent days, dragging the market down from early highs. Pfizer fell $2.50 to $116, Eli Lilly fell $2 to $63.13 and Schering-Plough lost $1.62 to $102.63.

* Besides Intel, helping to lead the Nasdaq higher were technology names Dell Computer, up $4.50 to $111.88, and Sun Microsystems, up $3.25 to $49.38.

On the NYSE, however, IBM fell $2.63 to $117 as one of the Dow's biggest decliners. The Dow's other big movers included American Express, down $3.31 to $114.56, and Alcoa, up $3.75 to $72.38.

Overseas, Tokyo's Nikkei stock average rose 0.8%, Frankfurt's DAX index rose 0.6% and London's FTSE-100 rose 0.8%.

Market Roundup, D8

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