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Stocks Decline but Bounce Up From Low Point

September 21, 2000|From Times Staff and Wire Reports

Stocks closed broadly lower Wednesday, though well off their midday lows, as oil prices and the falling euro continued to dog share prices.

A midday recovery was sparked in part by Treasury Secretary Lawrence Summers' comments that the government is closely watching the oil situation, which some investors took to mean there could be federal action soon--perhaps to release U.S. strategic reserves.

On Wall Street, the Dow industrials closed down 101.37 points, or 0.9%, at 10,687.92, after recovering from a 222-point morning drop.

The Nasdaq composite, down as much as 70 points, ended with a gain of 31.80 points, or 0.8%, at 3,897.44.

Still, losers topped winners by 23 to 16 on Nasdaq and by 17 to 12 on the New York Stock Exchange in active trading.

Analysts cautioned that investors remain uncertain about corporate earnings and are likely to continue selling while they await the release of third-quarter results during the next month.

Crude oil hit a fresh 10-year high Wednesday after news late Tuesday of an unexpectedly large decline in U.S. inventories spurred concern that refiners won't be able to make enough heating oil before the weather turns cold.

"The market expected a rise in crude oil stocks and took off when they fell," said Bill O'Grady, director of futures research at A.G. Edwards & Sons Inc. in St. Louis.

Crude futures for October delivery rose 69 cents, or 1.9%, to $37.20 a barrel on the New York Mercantile Exchange, after peaking at $37.80.

Summers, speaking in Washington, said he is closely watching energy and currency markets, though he declined to say whether the government would release U.S. crude reserves into the market.

"What happened in the late afternoon was we saw bargain hunters trying to get ahead" in the stock market, said Arthur Hogan, chief market analyst at Jefferies & Co. "But higher oil prices and the low European currency are still on the front burner, and that's not good for the markets."

Rising yields in the Treasury bond market also may haunt the stock market. The yield on the 10-year T-note rose to 5.90% from 5.86% on Tuesday and now is the highest since early August. Yields are rising in part on concerns about oil price inflation, traders say.

Among Wednesday's highlights:

* Multinational consumer stocks led the Dow lower. Many of the companies are facing weaker sales and earnings because of the euro's slump. Coca-Cola fell $2.63 to $50.25, 3M lost $2.13 to $81.75, Gillette eased 19 cents to $28.38 and Eastman Kodak fell $1.25 to $59.13.

* Sprint PCS sent many telecom stocks lower after the company said earnings will be lower than expected. Sprint PCS slid $7.56 to $33.25, WorldCom lost $1.13 to $27.31 and Wireless Facilities dropped $7.94 to $64.

* On the plus side, some major tech stocks gained. Investors may be betting the companies are less vulnerable than those in other industries to a slowing economy and to euro woes.

Intel gained $2.69 to $63.06, Broadcom rose $7 to $242.38 and EMC surged $5 to 103.25.

Some Internet names also rallied. Ebay jumped $10.88 to $76.56--a 16% gain--after the Internet auctioneer released sales projections implying revenue growth approaching 50% per year.

Also gaining were Inktomi, up $5.88 to $128.88, and Yahoo, up $1.63 to $109.69.

* Many oil stocks fell despite higher prices. Exxon Mobil lost $1.50 to $86.50, Chevron lost $1.06 to $87 and Total Fina Elf slid $1.38 to $75.13.

Market Roundup: C11, C12

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