NEW YORK -- U.S. stocks yesterday extended the worst 14-day decline since 1990 as concern mounted that corporate America's best news is behind it.
Companies ranging from drugmaker Warner-Lambert Co. to oil producer Mobil Corp. beat profit estimates for the latest quarter only to see their shares fall. The slump stems partly from growing doubt that companies will be able to match or exceed analysts' earnings forecasts for the rest of the year.
The Dow Jones industrial average fell 35.88 to 5,390.94. The New York Stock Exchange's "uptick" rule was triggered twice as the 30-stock average fell 50 points, pared its loss to less than 25 points, then slid 50 points again. The Dow industrials are now 6.7 percent below their May 22 record of 5,778.
Shares of Sears, Roebuck & Co., AT&T; Corp. and United Technologies Corp. paced yesterday's retreat. AT&T;'s stock fell $1.75 to $51.625 after an analyst at Merrill Lynch & Co., cut his estimate for the company's 1997 earnings to $3.95 a share from $4.10. He cited concern that revenue from long-distance operations may not match earlier forecasts.
Sears' stock dropped $1.625 to $42.50, bringing its two-day slide to $3.75, or 8.1 percent. Sears topped second-quarter earnings estimates, reporting net income of 67 cents a share Thursday.
The Nasdaq composite index fell 16.29 to 1,081.39 and the Standard & Poor's 500 index dropped 4.96 to 633.77.
The Russell 2,000 Index of small capitalization stocks fell 3.89 to 317.65; the Wilshire 5,000 Index dropped 60.69 to 6209.4; the American Stock Exchange market value index fell 5.79 to 542.97; and the S&P; 400 midcap index slid 2.22 to 219.44.
Declining stocks outnumbered advancers by 1,770 to 633 on the NYSE. Some 327 million shares traded.
Among computer-related issues that fell, Iomega Corp. shed $2.625 to $19.875 in trading of more than 14 million shares, making it the most active on U.S. exchanges. Systemsoft Corp. fell $1.375 to $19.625; Xilinx Inc. lost 62.5 cents to $29.25; Seagate Technology Inc. slipped $1.125 to $40.75; and Cisco Systems Inc. fell $1.125 to $50.625.
For a second day, stocks fell after a report that some $4.04 billion of assets was withdrawn from equity mutual funds in the week ended July 17, the most since AMG Data Services began tracking the figure in 1992.
The Dow Jones transportation average slumped 35.38 to 1,983.42, its lowest since last Tuesday's 1,980.57. On Friday, Delta Air Lines Inc.'s prediction that it won't meet a cost-cutting goal overshadowed better-than-expected earnings and sent airline stocks reeling.
Shares of Delta fell $2.50 to $70.25; UAL Corp. slid $1 to $45.25; British Airways PLC's American depositary receipts slumped $1.125 to $79.25; and AMR Corp. dropped $1.25 to $77.50.
Better-than-expected earnings didn't help Warner-Lambert yesterday. While net income for the maker of Halls cough drops beat analyst estimates by 2 cents a share, its stock dropped 25 cents to $53.875.
Mobil's earnings of $2.03 a share surpassed estimates by 14 cents. Its stock fell 37.5 cents to $114.75.
Pub Date: 7/23/96