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Nasdaq, Tech Stocks Gain; Dow Is Down

March 27, 1998|From Times Wire Services

Stocks ended mixed on Thursday, with small-company indicators continuing to reach new highs and technology stocks steaming ahead to their third-straight record close.

Meanwhile, bond prices eased, the dollar fell and oil prices rallied as producers prepared to cut output.

The Dow Jones industrial average tried without success to rekindle an assault on the 9,000 mark but ended down 25.91 points at 8,846.89.

"We're treading water until we finally get the courage to go over 9,000," said Ben Hock, director of equity research at John Hancock Funds.

Trading on the New York Stock Exchange was moderate. Declining issues narrowly outran advancers on the Big Board.

Broad market indexes were firmer, buoyed again by technology shares.

The Nasdaq composite set its third consecutive record, rising 4.03 points to 1,828.54. The Russell 2,000 index of smaller companies rose 0.67 point to 477.81, also a third straight high.

The Nasdaq market was boosted by news that semiconductor heavyweight Intel increased its stock buyback program by 100 million shares, worth about $7.7 billion.

The Standard & Poor's 500-stock list fell 1.13 points to end at 1,100.80. The NYSE composite index fell 0.55 point to 572.21.

Given the strength in the broad market, investors seemed almost relieved to see the rip-roaring blue chips slow down just a bit.

"It's a very good consolidation, considering the substantial appreciation that's been realized since the beginning of the year, and in 1997 and 1996," said Ned Riley, chief investment officer at BankBoston.

The Dow hit its low after a government report that corporate profits in the final quarter of last year staged the sharpest decline in more than a year. The report for a period early in the Asian crisis raised questions about whether the profit outlook would be even worse this year.

Traders and analysts conceded that that was old news. But they said it may indicate that first-quarter profits, which companies will begin to report in a few weeks, will be weak as well.

Analysts viewed this week's retreat in the blue-chip market as a healthy pause and said there was no change in economic fundamentals to alter the market's upward trend.

"The market just wants to settle out here and do some consolidating. It's no surprise," said Richard Cripps, chief market strategist at Legg Mason Wood Walker.

In commodity markets, crude oil prices extended their recent recovery on the prospects that oil producers would scale back production to ease a global supply glut.

The rise in oil prices helped to drag the inflation-wary bond market lower. The bellwether 30-year Treasury bond price ended lower, raising its yield to 5.97%, from 5.94% on Wednesday.

Among Thursday's highlights:

* Firmer oil prices pulled oil-related stocks higher but pressured shares of transportation companies, which are heavy consumers of oil. Oil futures settled up 35 cents at $16.83 a barrel.

Dow component Chevron rose 50 cents to $84.31; Texaco rose $1.63 to $61; Mobil rose 88 cents to $78.50; and oil driller Rowan jumped $1.19 to $31.13. But US Airways Group fell $1.56 to $71 and Delta Air Lines slumped $2.25 to $117.56.

* Among upwardly mobile tech stocks, Intel rose $2.13 to $78.19 after the chip maker authorized the buyback. The board also plans to elect Craig Barrett to succeed Andrew Grove as chief executive after the May 20 annual meeting. Grove will remain chairman.

Meanwhile, Cypress Semiconductor rose $1 to $10.06 and Applied Materials gained $1 to $36.25.

But Sensormatic Electronics fell 38 cents to $16.69 after warning of weak quarterly results.

And Broderbund Software fell $2.81 to $21.06 after reporting lower-than-expected earnings.

* Tobacco stocks fell as a Senate committee considered compromise legislation that would raise cigarette prices $1.10 a pack over five years while capping the industry's legal costs. Dow component Philip Morris fell $1 to $42.63 and RJR Nabisco Holdings fell 69 cents to $32.94.

* Gold stocks advanced with gold prices, which were up $2.60 per troy ounce at $301.70 in New York. Royal Oak Mines rose 38 cents to $1.19, Echo Bay rose 25 cents to $2.25, and Newmont Mining rose $2.25 to $30.88.

* Echlin rose $3 to $51.94 after Connecticut legislators defeated a bill backed by the auto-parts maker that would have strengthened its efforts to block a takeover by rival SPX, which made a hostile $3-billion offer last month. SPX fell 81 cents to $74.44.

In overseas trading, Tokyo's Nikkei index climbed 1.9% after the government announced a $124-billion stimulus plan for the economy. But the FTSE-100 in London lost 1%, and Frankfurt's DAX index dropped 1.7%.

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