NEW YORK — NEW YORK -- U.S. stocks fell yesterday, following bonds, as concern about rising interest rates outweighed optimism that economic growth may boost corporate profits. Semiconductor, bank and consumer-goods stocks declined the most.
The Dow Jones industrial average fell 9.24 to 5,687.87, led lower by shares of interest-sensitive J. P. Morgan & Co., while the Standard & Poor's 500 index fell 1.15 to 672.16.
The Nasdaq composite index was little changed, rising 0.27 to 1,230.04.
On the New York Stock Exchange, declining stocks outnumbered advancing stocks by 1,259 to 1,087.
The Russell 2,000 index of smaller shares rose 0.90 to 359.74; the Wilshire 5,000 index fell 8.11 to 6686.03; and the American Stock Exchange market value index rose .17 to 599.48.
The yield on the benchmark 30-year Treasury bond, which moves in the opposite direction of its price, rose to its highest since May 1995.
It climbed 10 basis points to 7.12 percent after a 13-basis-point rise Friday.
Disappointing earnings prospects roiled chip shares. Intel Corp., the No. 1 chip maker, dropped $1.125 to $74.125.
Integrated Device Technology Inc. fell $1.0156 to $11 and Zycon Corp. fell $2.25 to $10.75. Both semiconductor companies warned that slow demand from personal computer makers would cut into sales.
Applied Materials Inc. fell $1.25 to $33 after Goldman, Sachs & Co. removed the manufacturer of chip-making equipment from its "recommended list."
Last week, Altera Corp. warned that its computer chip sales for the second quarter would fall 15 percent below first-quarter levels, and International Business Machines Corp. warned that prices for its memory chips would contribute to slimmer-than-expected margins.
Bank stocks fell as rates rose. J. P. Morgan slid $1.375 to $85.625, while BankAmerica Corp. dropped 87.5 cents to $76.
Shares of consumer-products companies also declined. Drugmaker Eli Lilly & Co. dropped 62.5 cents to $66.625 and Colgate-Palmolive Co., a household products company, slid 87.5 cents to $82.375.
Kellogg Co., which makes Special K and Froot Loops breakfast cereals, fell after the company said it would slash prices an average of 19 percent on 16 cereals. The Battle Creek, Mich.-based company fell $2.875 to $72.
General Mills Inc., the second-largest cereal company after Kellogg, fell $1.50 to $55.875 as investors anticipated that a price war started by Philip Morris Cos. last month would hurt earnings across the cereal industry. Philip Morris rose 50 cents to $101.625.
United Healthcare Corp. fell $1.875 to $50.875, leading a retreat in health-management shares amid concern that higher-than-expected patient visits will crimp earnings this quarter. Analyst Todd Richter yesterday cut his earnings estimates for this year and next on United Healthcare and Pacific Healthcare Systems Inc. in anticipation of increased costs.
Pacific Healthcare Class B shares slid $1.375 to $74.625.
On Friday, Humana Inc. said an unexplained increase in the use of health-care services would lead to lower earnings than the company reported a year earlier. Humana fell $1 to $18 yesterday after losing $4.125 Friday.
Black & Decker Corp., which makes tools, rose 62.5 cents to $40.625. Phelps Dodge Corp., a copper miner and producer of truck wheels, added 75 cents to $67.75.
Iomega Corp. jumped $6 to $43.875 after IBM said it would include the company's best-selling Zip disk drive in versions of its Aptiva line of PCs for small business.
Cephalon Inc. added 12.5 cents to $23.25, and Chiron Corp. climbed $2.50 to $99.50. The Food and Drug Administration voted Friday to allow distribution of the two drug companies' treatment for Lou Gehrig's disease before it receives full marketing approval.
Pub Date: 6/11/96