NEW YORK — NEW YORK -- U.S. stocks fell yesterday as a retreat in Philip Morris Cos. and disappointing December sales at some of the nation's fastest-growing retailers offset a rebound in semiconductor shares.
A two-day decline in household products and beverage shares, caused by concern that a weak Mexican peso will hurt profits, also drove the stock market lower.
The Dow Jones industrial average, which seesawed in a 17-point range yesterday, closed down 6.73, at 3,850.92. Philip Morris and Du Pont Co. together accounted for almost seven points of the drop.
Philip Morris, steady most of the day, closed down $1.375, at $57.50, as word of an unfavorable court ruling spread through the market. A federal judge rejected tobacco companies' request for appeal of a ruling that liability lawsuits aren't pre-empted by cigarette health-warning labels. The stock gained $1.25 Wednesday on optimism about the company's plan to merge its food operations.
The Standard & Poor's 500 fell 0.37, to 460.34, after rising as much as 0.59 earlier in the day. Philip Morris and Du Pont., along with Procter & Gamble Co. and Coca-Cola Co., also led the drop in the broader index.
The Nasdaq combined composite index closed down 0.18, at 745.66, after rising as much as 2.61.
Decliners were about even with advancers on the New York Stock Exchange. Trading was active, with about 309 million shares changing hands on the Big Board.
U.S. government bonds fell for the fifth time in six days amid concern that today's December jobs report will suggest brisk growth and accelerating inflation. The benchmark 30 1/4 -year Treasury bond fell about 1/2 , or $5 per $1,000 bond, pushing the yield up five basis points, to 7.90 percent, just shy of Tuesday's three-week high of 7.92 percent.
Specialty retailers were among the biggest decliners yesterday on the heels of December sales reports. Some retailers' sales fell below analysts' expectations while others slashed prices to boost revenue, a decision that bodes ill for fourth-quarter profits, analysts said.
Gymboree Corp. tumbled $4, to $23, after the children's clothing retailer said same-store sales, or revenue from shops open more than one year, rose 5 percent last month, below analysts' estimates of an 8 percent to 10 percent increase.
Tiffany & Co. slid $5.875, to $34.125, after the jewelry retailer reported a slowdown in Japanese sales. Natural Wonders Inc., whose same-store sales fell 4.3 percent, fell $1.25, to $3.25. Tandy Corp. fell $1.375, to $49.875, and Toys 'R' Us Inc. eased 62.5 cents, to $29.375.
Discount chains and department stores' sales fared better. Wal-Mart Stores Inc., the nation's largest retailer, rose 50 cents, to $22.125; the discount retailer said same-store sales rose 6.8 percent. Kmart Corp., whose same-store sales rose 3.5 percent, gained 12.5 cents, to $13.50.
The slump in some retailers was countered by strength in semiconductor shares, which helped avert deeper losses in the Nasdaq index.
Intel Corp. rose 50 cents, to $64.125, and LSI Logic Inc. went up $1.50, to $39.375.
The group got a boost after Dell Computer Corp. and Gateway 2000 Inc., two of the biggest makers of personal computers using Intel's Pentium microprocessor, said they are ready to ship new, error-free Pentium chips in their PCs. Bad publicity about a flaw in the Pentium, first disclosed in November, forced Intel to offer replacements in December -- after its stock had fallen 11 percent.
Dell rose $1.375, to $43.625, and Gateway 2000 added 43.75 cents, to $22.125. Adobe Systems Corp. rose $1.125, to $29.875, after the software maker surpassed investor expectations with a 50 percent surge in fourth-quarter profit from operations.
Consumer-products makers fell for a second day amid worries that the Mexican peso's collapse will hurt profits. Kimberly-Clark Corp. fell $1.125, to $49.375, extending Wednesday's 62.5-cent drop. Goldman, Sachs & Co. cut its rating of the stock, and a Salomon Bros. Inc. analyst reduced earnings estimates amid concern about Mexico.
PepsiCo Inc. shed 75 cents, to $34.75, after dropping 50 cents yesterday when Donaldson, Lufkin & Jenrette cut its rating out of fears the weak peso will disrupt the Mexican economy and hurt earnings. Coca-Cola slipped 25 cents, to $50.375.