NEW YORK -- U.S. stocks fell yesterday in a late-day plunge sparked by a retreat in bonds and five rounds of computer-guided selling. Electrical equipment and oil shares led the decline.
Concern that rising bond yields will stunt corporate profit growth sent stocks lower for a third day in a row. The market's rally during the first six weeks of this year was built on the prospect that falling borrowing costs would revive earnings.
The Dow Jones industrial average dropped 43.00 to 5,506.21. The average tumbled 50 points in the last hour of trading, triggering the New York Stock Exchange's "uptick rule" five minutes before the close to limit computer-driven trades and stabilize the market. It was the fifth time in three days the rule took effect.
Five series of computer-guided sell orders took 97.9 points off the Dow industrials during the day, according to Birinyi Associates Inc. The 30-stock average has slumped 124.28 points, or 2.2 percent, from its high of 5,630.49 on Friday.
Among the Dow industrials that lost, Eastman Kodak Co. fell $1.25 to $71.50; Caterpillar Inc. slumped $1.625 to $67.75; and General Electric Co. dropped $1.625 to $76.125.
The Standard & Poor's 500 index, representing 75 percent of the market capitalization of all U.S. stocks, fell 2.49 to 644.75, after rising as much as 7.62. The Nasdaq composite index, filled with computer-related companies like Microsoft Corp. and Intel Corp., closed up 1.38 at 1,107.55, after rising 6.76.
Some 1,234 stocks advanced and 1,123 stocks lost on the New York Stock Exchange. About 447 million shares changed hands on the NYSE, up from 431 million yesterday and above the daily average volume of 382 million over the last six months.
Among other indexes, the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq stock exchanges, fell 12.16 to 6,342.10.
Gauges made up of smaller companies gained. The Russell 2,000 index of small-capitalization stocks rose 0.41 to 325.26; the American Stock Exchange market value index climbed 2.80 to 566.66; and the S&P; 400 midcap index rose 0.59 to 229.81.
Traders said the bond market's retreat rattled investors' optimism that borrowing rates will steady or fall. The yield on the 30-year government bond remained unchanged at 6.47 percent.
Bonds declined after an afternoon auction of five-year Treasury notes was met with weak demand.
Shares of electrical equipment companies lost. General Electric fell $1.625 to $76.125, reversing a $1.375 gain earlier after Thai Airways International PLC. said it planned to order 21 new airplanes, some with GE engines.
Mobil Corp. led shares of other oil companies lower. The Virginia-based company made a $1.25 billion takeover bid for Ampolex, the third-largest oil producer and explorer in Australia. Mobil shares fell $2.125 to $107.875.
Among other oil companies that fell, Chevron Corp. slid $1.25 to $54.50 and Exxon Corp. weakened $1.125 to $78.25.
Companies that make products for the Internet fell for a second day. The CBOE Internet index of 15 stocks tumbled 4.57 to 125.04 after AT&T; Corp. said it would give some free Internet time to home computer users. AT&T; was unchanged at 64.
Shares of America Online Inc. were the most actively traded stock on U.S. exchanges, dropping $1.75 to $47.375. Netcom On-Line Communications Services Inc. fell $2.375 to $20.375; Uunet Technologies Inc. fell $3.375 to $28.625; and Netscape Communications Corp. fell $2.25 to $51.50.
Nokia's American depositary receipts fell $1.875 to $35.50. The Finnish telecommunications equipment company issued its second profit warning in three months, citing slackening demand for mobile phones in the United States. Rival Motorola Inc. fell $1.125 to $55.625 and ADRs of Sweden's Ericsson AB fell 56.25 cents to $22.25.