NEW YORK -- U.S. stocks closed little changed yesterday as a late surge in Apple Computer Inc. offset concern that a three-week slide in the Mexican peso will damage some companies' 1995 earnings.
Apple soared $3.0625, to $46.75, amid speculation that International Business Machines Corp. is likely to buy out the personal computer maker for $60 a share. IBM dropped 75 cents, to $75.875.
The Dow Jones industrial average climbed back to 3,862.03, down 4.71, after falling as much as 26.58. Declines in J. P. Morgan & Co., IBM and Chevron Corp. paced the loss.
Drug and bank stocks fell for most of the day amid concern their earnings may be hurt by events in Mexico.
"There probably will be adjustments to earnings because of currency concerns in Mexico," said Joseph DeMarco, managing director for equity trading at $4 billion HSBC Asset Management, a unit of Hongkong & Shanghai Bank. "There's a fair amount of U.S. companies that have operations in Mexico, and that's contributing to weakness in a number of these stocks."
Among pharmaceuticals, Warner-Lambert Co. dropped $1.25, to $74.875; Schering-Plough Co. fell $1, to $71.875; SmithKline Beecham Plc dropped 75 cents, to $33.75; Pfizer Inc. eased 25 cents, to $75; and Eli Lilly & Co. dipped 50 cents, to $63.25.
Citicorp dropped $1.375, to $40.375; NationsBank Corp. fell 62.5 cents, to $46.50; J. P. Morgan & Co. slid $1.375, to $56.375; and First Chicago Corp. declined 50 cents, to $46.125.
For U.S. corporations, "it's not going to be useful that we're going to have instability on any of our borders," said Arthur Micheletti, investment strategist at $1.2 billion Bailard, Biehl & Kaiser in San Mateo, Calif.
Mexican stocks rebounded from four-year lows yesterday after President Clinton pledged more U.S. support for the Mexican economy.
Concern about the effect of Mexico on U.S. earnings was heightened when Federal-Mogul Corp., a $1.6 billion auto parts maker based in Michigan, said it won't meet analysts' earnings forecast, partly because of the drop in the Mexican peso. The stock plunged $5.375, to $17.50.
"I don't think the full ramifications have really come down yet" from Mexico, said David Butler, head of equity trading at Kemper Financial Services in Chicago. "I don't think we've even seen the ripple effects yet."
Among broad market measures, the Standard & Poor's 500 index was little changed, at 461.67, down just 0.01, after falling as much as 3.03. Oil, bank, semiconductor, telephone and natural gas stocks posted the largest losses.
The Nasdaq combined composite index retreated 0.78, to 755.74, hurt by declines in Oracle Systems Corp., Biogen Inc., Nextel Communications Inc., Intel Corp. and MCI Communications Corp.
More than 11 stocks fell in price for every 10 that rose on the New York Stock Exchange, where 346.3 million shares changed hands, down from 351.3 million yesterday.
Early in the day, share prices got a lift from a benign report on consumer prices in December.
Yields on 30-year Treasury bonds fell as low as 7.82 percent, then rose to 7.84 percent, down from 7.87 percent Tuesday.