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Stocks fall from record heights Dow industrials slump 31 points, but Nasdaq hits new high


NEW YORK -- U.S. stocks fell yesterday as shares of AT&T; Corp. and MCI Communications Corp. slumped amid concern that a telecommunications bill passed in Congress will make it harder to turn a profit in the long-distance industry.

The Dow Jones industrial average retreated from record territory, dropping 31.07. to 5,373.99 -- its first decline in six days. The 30-stock average's fall was fueled by computer-guided "sell" orders, according to Birinyi Associates. Texaco Inc., DuPont Co. and AT&T; paced the decline.

Shares of AT&T; dropped $1.75 to $64.625 after Congress passed a bill that will allow regional Baby Bell companies to eat into the $70 billion long-distance market. It will take longer for long-distance providers such as AT&T; to break into local markets, analysts said.

MCI Communications Corp.'s shares dropped $1.125 to $28, and Sprint Corp. dropped 12.5 cents to $42.75.

The Standard & Poor's 500 index also fell from a record, bTC slumping 2.61 to 635.85.

However, the Nasdaq composite index rose 2.7 to a record 1,072.15, surpassing its Dec. 5 high of 1069.79. Oracle Corp., Intel Corp. and DSC Communications Corp. jumped.

Among the biggest losers on the day was Hasbro Inc. The toy maker's stock tumbled $6.125 to $34.625 after Mattel Inc. pulled its $5.2 billion offer to buy its rival.

Also hurting stocks was concern that Wednesday's interest rate cuts by the Federal Reserve won't boost the economy until later in the year. Economically sensitive auto companies fell. General Motors Corp. slipped $1.625 to $52; Ford Motor Co. slid 62 1/2 cents to $29.875; and Chrysler Corp. dropped $2 to $56.875.

Yesterday's most active stocks in U.S. composite trading were Hasbro, Iomega Corp., Kmart Corp., Intel and Applied Materials Inc.

Among broad market indexes, the Russell 2,000 index of small capitalization stocks rose 0.4 to a record 317.72; the Wilshire 5,000 Index, comprising stocks on the New York, American and Nasdaq stock exchanges, fell 14.93 to 6,225.33; the AMEX market value index fell 0.14 to 555.54; and the S&P; 400 midcap index dropped 0.66 to 221.3.

A slump in bonds -- and resulting jump in yields -- also hurt stocks. The yield on the benchmark 30-year Treasury bond rose as high as 6.16 percent from 6.07 percent.

Some six stocks rose for every five stocks that fell on the New York Stock Exchange, where 418.5 million shares changed hands.

While long-distance providers were falling, shares of local telephone providers gained. The telecommunications bill could result in growth and consolidation among local telephone companies, analysts said.

Among local telephone companies, Pacific Telesis Group rose 87.5 cents to $30.50; USWest Inc. rose 25 cents to $35.875; and Ameritech Corp. climbed 37 1/2 cents to $60.25.

Bell Atlantic was 12 1/2 cents lower, to $68.875.

Some investors said the Baby Bells won't be able to market their services as well as the long-distance companies, which have been competing and honing their pitch for more than a decade.

Telecom equipment companies are expected to benefit from the expansion. DSC Communications Corp. shares strengthened $2.5844 to $33; ADC Telecommunications Inc. rose $1.50 to $41.75; and Scientific-Atlanta Inc. rose 75 cents to $17.

Shares of computer and semiconductor companies extended Thursday's gains amid optimism demand for their products is burgeoning.

Among those that continued to climb, LSI Logic Corp. added $2.125 to $34.25, after jumping $3.875 Thursday on a report that orders for its chips increased last month.

Intel rose 75 cents to $57 and Micron Technology Inc. was up 50 cents to $35.75.

Shares of Apple Computer Inc. rose 87.5 cents to $29.25 after the Wall Street Journal reported that Chief Executive Michael Spindler was fired, indicating that the world's No. 3 computer maker rejected Sun Microsystems Inc.'s bid to buy it.

Investors poured money into mutual funds for a seventh straight week, according to AMG Data Services. Some $5 billion was invested in stock funds during the week ended Wednesday, up from $4.3 billion the previous week.

Gold stocks continued to rally as gold bullion surged $4 to $417.7 an ounce, its highest in six years. Newmont Mining Corp. gained $1 to $59.125, Barrick Gold Corp. rose 62.5 cents to $31.50 and Homestake Mining Co. gained 37.5 cents to $20.

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