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Dow Dips 19 as Greenspan Heads for Hill

June 10, 1998|From Times Staff and Wire Reports

Technology and transportation shares led many indexes higher Tuesday, but most stocks fell in another hesitant session before today's visit to Capitol Hill by Federal Reserve Board Chairman Alan Greenspan.

The Dow Jones industrial average dipped 19.68 points, or 0.2%, to 9,049.92, interrupting a three-session, 266-point rebound from the selling pressure of the previous two weeks.

Broader stock indexes rose, led by the technology-heavy Nasdaq composite, but declining issues outnumbered advancers overall.

"The market at this juncture has little leadership and little direction," said Alan Ackerman, market analyst at Fahnestock & Co.

Meanwhile, the dollar continued to gain against the Japanese yen after hitting a seven-year high on Monday, despite reports that Japanese officials wanted to support the yen aggressively in the currency market.

The dollar touched 141.05 yen in Tokyo, its highest level since June 1991. It finished at 141.35 yen in late New York trading, up from 140.71 at Monday's close. The dollar also rose against the German mark, ending at 1.7799, up from 1.7795.

The prospect of falling oil prices spurred airline and trucking stocks. The Dow Jones transportation average jumped 3.1%, its biggest rise since a 3.2% jump in late December.

On the flip side, the outlook for oil hurt stocks in that sector. The Standard & Poor's oil index slid 1.2%.

The International Energy Agency cut its estimate of oil demand. The agency said demand is dropping in Asia, where economies are slowing. Crude futures slumped 4.8% to $13.85 a barrel, and are now 25% lower than a year ago.

The Morgan Stanley high-tech index rose 1.7% as several large tech stocks notched gains. Dell Computer gained $1.81 to $85.50, Microsoft added $1.38 to $87.06 and Intel picked up 88 cents to $70.19.

Still, investors showed little enthusiasm overall. Declining issues outnumbered advancers by a 9-to-7 margin on the New York Stock Exchange, where composite volume totaled 674.8 million shares, up 8% from Monday's 647.2 million.

With no major economic data due until later in the week, buyers remained leery of what Greenspan might say when he delivers one of his periodic reports to Congress today.

Greenspan's comments--usually cryptic, and sometimes market-moving--will be combed for clues as to whether the Fed might raise interest rates to slow the economy and keep inflation in check.

"I don't see any reason why he should rock the boat," said Hugh Johnson, chief investment officer at First Albany Corp. "There is not the kind of level of irrational exuberance in the market and the case is a strong one that the economy will slow."

Bond yields remained largely unchanged Tuesday. The yield on the benchmark 30-year bond held steady at 5.78%.

Among Tuesday's highlights:

* Airline stocks got a lift for the second day in a row. American parent AMR rose $6 to $162, Delta Air Lines added $4.81 to $125.50, US Airways tacked on $5.19 to $75.13 and UAL gained $1.69 to $82.38.

Among truckers, USFreightways picked up 69 cents to $32, CNF Transportation gained 81 cents to $44.06 and CSX rose 81 cents to $48.56.

* General Motors fell 75 cents to $71.13 after the company said that about 16,000 workers have been idled by a United Auto Workers strike in Flint, Mich.

* BridgeStreet Accommodations tumbled $4, or 43%, to $5.25 after the temporary-housing company said it expects second-quarter earnings to be about 8 cents a share, compared to analysts' estimates of 14 cents. The company, which provides furnished apartments and townhouses for business travelers, blamed competition in some markets. The company also named a new chief executive.

* American Express fell $1.88 to $107.13, leading the decline in the Dow industrials. It had risen 4.3% on Monday amid takeover speculation.

* Merck rose $1.50 to $123, benefiting from a study showing that drugs made by Merck, Bristol-Myers Squibb and Zeneca Group to treat high blood pressure increased survival rates if given to patients immediately following a heart attack. Bristol-Myers rose 25 cents to $112.19, but Zeneca's American depositary receipts fell 13 cents to $43.75.

* HBO & Co. rose $2.31 to $62.06 after Bear, Stearns & Co. reiterated a "buy" rating on the health-care software company. Analyst Raymond Falci said 90% of HBO's sales are domestic and that demand for its services is increasing.

Market Roundup, D9

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