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Stocks Mixed; Techs Buoyed by Bargain Hunters

June 03, 1998|From Times Staff and Wire Reports

Some beaten-down technology stocks got a lift Tuesday, but the U.S. market overall closed mostly lower.

Most Asian markets, meanwhile, fell again, as the pessimism gripping the region shows no sign of easing. But Russian stocks rose.

On Wall Street the Dow Jones industrials lost 31.13 points to 8,891.24, the lowest close for the blue-chip index since April 1.

The Nasdaq composite, however, rose 14.97 points, or 0.9%, to 1,761.79 after Monday's steep 32-point sell-off.

In the broad market, losers outnumbered winners by 2,240 to 1,917 on Nasdaq and by 1,509 to 1,468 on the Big Board, as trading volume picked up.

Tech stocks, which have led the market lower in recent weeks in part on fears that Asia's woes will deal another blow to tech-industry corporate earnings this quarter, showed some life. Intel rose $1.25 to $69.25, Microsoft gained $1.75 to $85.50 and Dell Computer jumped $4.31 to $82.63.

But some analysts said the rebound may be short-lived.

"There's a bit of a 'dead cat bounce' going on," said Arnie Owen, managing director of capital markets at Cruttenden Roth. "But overall, it's fear and loathing in technology land."

Some analysts say that, outside of technology and a limited number of other sectors, corporate earnings overall have not been devastated by Asia's turmoil. Strong domestic and European demand helped many U.S. companies' profits in the first quarter.

Still, "You've got an incredible tug-of-war going on," said James Weiss, deputy chief investment officer at State Street Research & Management in Boston. "We've had an incredible upsurge in the market, and that has collided with a period of high uncertainty about where the economy [and earnings] are headed."

The bond market, which had rallied Monday in another Asia-induced "flight to safety," gave ground Tuesday amid economic data suggesting that the domestic economy remains resilient.

The yield on the 30-year Treasury bond, which fell to a four-month low of 5.77% on Monday, rose to 5.79% Tuesday.

Also hurting bonds: The Japanese yen rallied from a seven-year low against the dollar, helped by speculation that the Group of Seven industrialized countries might consider a concerted effort to rescue the embattled currency during their meeting in Paris next week.

The dollar closed in New York at 138.83 yen, down from 139.70.

Also, Russia's devastated stock market jumped 12% on hopes of a G7 support package for Russia.

But in Asia, the Hong Kong stock market eased 0.2%, South Korea dropped 3.7% and Singapore fell 2.2%. Struggling Indonesia said its economy will likely shrink by 10% this year.

Among U.S. market highlights:

* Some telecommunications-equipment stocks were boosted by Sprint's announcement of a new multiple-call phone technology. (Story, A1) Ciena rocketed $6.19 to $57.56, Lucent gained $2.75 to $71.69, DSC Communications rose $1.81 to $18.81 and Cisco Systems jumped $2.88 to $76.44.

But PairGain Technologies sank $2.25 to $13.13.

Sprint rose 50 cents to $72.44.

* Weak blue chips included Boeing, down $1.75 to $45.88; Goodyear, down $1.88 to $70.94; and Merck, down $1.38 to $115.13.

Also, Avon Products lost $1.75 to $79.56 after saying that the shutdown of its Chinese business hurt second-quarter revenue.

* Major bank stocks were broadly higher, led by Chase Manhattan, up $2.88 to $136.94.

* Vesta Insurance Group plunged $24.69 to $28 after the company said it was conducting an internal probe into accounting irregularities that are likely to affect its previously reported earnings for the last two quarters. Robert Huffman, Vesta's CEO, quit.

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