NEW YORK -- U.S. stocks were mixed yesterday as investors embraced AT&T; Corp.'s $3 billion sale of Lucent Technologies Inc. shares -- the largest-ever initial offering in the U.S.
"The market was able to float this Lucent deal, which is incredible," said Peter Coolidge, senior equity trader at Brean Murray Foster Securities. With the Dow Jones industrial average already up 11 percent this year, "this bodes well for the overall market. It was a real watershed."
At the same time, investors punished shares of DSC Communications Corp., Hyperion Software Corp. and other companies that said quarterly profits won't match expectations.
The Dow industrials fell 6.86 to 5,682.88 from Tuesday's record 5,689.74, led lower by International Business Machines Corp., down $2 to $117.75.
Aluminum Co. of America, up $1.625 to $62, was the first company in the 30-stock average to announce that first-quarter earnings beat expectations. Alcoa earned $1.01 a share, down from $1.08 last year but ahead of analysts' forecast of 94 cents.
The Nasdaq composite index gained 2.36 to a record 1,118.21, )) its first since Feb. 23, led by Intel Corp., Gartner Group Inc. and HBO & Co. The Standard & Poor's 500 index was little changed, falling 0.02 to 655.86, as losses in telephone and computer stocks balanced gains in airline and automobile companies.
Volume on the New York Stock Exchange totaled 383 million shares.
The New York and American stock exchanges and Nasdaq stock market all observed a moment of silence in honor of Commerce Secretary Ronald H. Brown, who died in a plane crash Wednesday in Croatia while on a trade mission.
Declining issues on the Big Board outnumbered advancing stocks by more than 11 to 10.
The American Stock Exchange market value index widened 2.78 to 577.10, its fifth consecutive record; the Russell 2,000 index of small-company stocks rose 0.72 to 334.79, also its fifth straight record; and the Wilshire 5,000 was ahead 6.12 to a record 6,461.61.
Lucent shares jumped $3.625 to $30.625, a gain of 13 percent from the $27-a-share offering price. Volume totaled 44.1 million shares, making it the most active initial offering ever.
Airlines were strong. Continental Airlines Inc., up $1.50 to $59.625, said it may report the most profitable first quarter in its history this month.
All the major U.S. airlines are expected to record profits in the first quarter, a seasonally weak period, Merrill Lynch said yesterday. The last time all the carriers earned a profit in the first quarter was the late 1970s.
UAL Corp., parent of United Airlines, rose $4.125 to a record $221.125; AMR Corp., parent of American Airlines, rose $2.50 to $92.375; Delta Air Lines Inc. jumped $2.875 to $81.50; and Alaska Air Group Inc. gained 25 cents to $30. Among freight carriers, Federal Express Corp. climbed $1.375 to $74.25 and American President Cos. rose 87.5 cents to $24.
Some stock prices suffered from companies' announcements late Tuesday and yesterday that quarterly profits won't meet expectations.
DSC Communications Corp. dropped $2.25 to $24.625. The telecommunications equipment maker said it will post first-quarter earnings and revenue below Wall Street's estimates.
Telephone stocks retreated as investors reappraised whether more mergers are in store. On Monday, SBC Communications Inc. agreed to buy Pacific Telesis Group for about $16 billion in stock.
Pacific Telesis fell $1.25 to $33.25, and BellSouth Corp. dropped $1 to $37.125.
Financial issues fell, including Federal National Mortgage, down 50 cents to $33.875, and regional banks such as First Bank System Inc., down 25 cents to $60.375.
Stock markets are closed today for Good Friday.
Pub Date: 4/05/96