Dow slips 21.68 after seven-day upswing Procter & Gamble, McDonald's account for over half of loss

NEW YORK — NEW YORK -- U.S. stocks fell yesterday as investors questioned whether restaurant and health-care companies' profits would live up to expectations. McDonald's Corp. and Columbia/HCA Healthcare Corp. led the decline.

The Dow Jones industrial average slid 21.68, to 5,579.55, after seven days of records that gave it a 4.2 percent gain. McDonald's and Procter & Gamble Co. accounted for more than half the drop.


Computer-guided program trades contributed almost 17 points to the decline, according to Birinyi Associates Inc.

Trading is expected to be volatile through tomorrow's "double-witching," when options on U.S. stock indexes and stocks expire.


Among the Dow stocks that fell, McDonald's dropped for a second day, sliding $2.125 to $50.50. On Tuesday, it was lowered to "attractive" from "buy" at Bear Stearns Cos.

Procter & Gamble slipped $1.875 to $85.75, and Texaco Inc. fell $1.625 to $81.

Some 1,173 stocks rose and 1,156 fell on the New York Stock Exchange, where 421.8 million shares changed hands, below Tuesday's 440.75 million.

The Standard & Poor's 500 index dropped 4.93 to 655.58, as regional telephone, savings-and-loan and health-care issues fell. The index has gained 6.44 percent so far this year.

Shares of health-care providers dropped after Columbia/HCA Healthcare, the nation's largest publicly traded hospital chain, announced its fourth-quarter profit rose 24 percent, slightly below estimates. Shares fell $1.25 to $56.75.

Humana Inc. earnings contributed to the decline. The Louisville, Ky., health-care provider fell $1.50 to $27.25 after it reported that its earnings rose 2.1 percent; enrollment gains were held back by higher medical costs per member.

While Humana's profits matched expectations, Merrill Lynch & Co. lowered its 1996 earnings estimates for the company, "primarily to reflect the expected slow earnings growth in the first half of the year," it said in a report to customers.

Among HMOs that fell, Foundation Health Corp. skidded $1.625 to $40; Oxford Health Plans Inc. dropped $1.25 to $81; and U S Healthcare Inc. lost 37.5 cents to $47.375.


The Nasdaq composite index rose 0.81 to 1,088.03 as Intel Corp., Oracle Corp. and WorldCom Inc. gained. Microsoft Corp., Cisco Systems Inc. and Amgen Inc. were the biggest decliners.

Among other indexes, the Russell 2,000 index of small companies climbed 1.25 to 321.07, approaching its high on Monday; the American Stock Exchange market value index added 0.36 to reach a high of 560.98; and the Wilshire 5,000 index dropped 26.98 to a 6,385.30.

Applied Materials Inc. closed up 62.5 cents at $39, after gaining $2.75 earlier in the day. The stock dropped $1.625 Tuesday. The Santa Clara, Calif.-based company announced that its fiscal first-quarter earnings more than doubled as sales of semiconductor production equipment soared.

Lam Research Corp., which also makes equipment used to manufacture chips, climbed $1.0625 to $39.5625.

The yield on the 30-year government bond rose 7 basis points to 6.09 percent as investors waited for economic reports that could sway the Federal Reserve's decision on whether to lower interest rates again.