NEW YORK -- U.S. stocks yesterday registered their worst loss in almost seven weeks as reports signaled persistent economic strength that could drive up borrowing costs.
The Dow Jones industrial average tumbled 64.73 to 5,647.65, tracking bonds lower. Procter & Gamble Co. and General Electric Co. led the worst decline since July 15, when a host of companies warned profits would disappoint.
Beverage and drug companies paced the slide in the Standard & Poor's 500 index for a second day. The S&P; 500 lost 7.41 to 657.40. The Nasdaq composite index dropped 8.85 to 1,145.03.
The Russell 2,000 index of smaller shares declined 1.10 to 334.51; the Wilshire 5000 index -- an array of stocks listed on the NYSE, American Stock Exchange and the Nasdaq stock market -- fell 59.87 to 6,474.27; the American Stock Exchange market value index fell 2.05 to 562.34; and the S&P; midcap index lost 1.64 to 232.77.
Trading was the highest in a week at 321.1 million shares. Declining shares outnumbered those that advanced on the New York Stock Exchange by a ratio of 16 to 7.
Steel, chemical and semiconductor shares gained as those economically sensitive industries were seen benefiting most from stronger growth. USX-U.S. Steel Group rose 50 cents to $27.25 and Dow Chemical Co. climbed 25 to $79.375. Intel Corp., the biggest chip maker, rose 12.5 cents to $81.375, and National Semiconductor Corp. jumped $1.875 to $18.25.
The yield on the 30-year bond rose 5 basis points to 7.03 percent.
Steady-earning companies continued to slide. Coca-Cola Co. fell cents to $50.375 and drug maker Pfizer Inc. dropped $1.25 to $72.25.
Microsoft, the biggest software company in the world, grew at twice the rate of Coke in the past 12 months and trades at 30.7 times earnings for the fiscal year that began in June. Its shares fell $1.375 to $124.25 yesterday, less than Coke in percentage terms.
Among other stable-growth shares, drugmaker Merck & Co. sank $1.25 to $66.50; Procter & Gamble dropped $2.125 to $89.75; General Electric slid $1.625 to $84.75; and Disney fell 50 cents to $57.75.
PepsiCo Inc. fell $1.25 to $28.75 yesterday, bringing its loss this week to 8.2 percent. Investors made it the second-most traded stock again yesterday, after Goldman, Sachs & Co. removed the drink, snack and restaurant company from its "recommended list." Two days earlier, Merrill Lynch & Co. cut the company's earnings forecast for 1996 and 1997.
Financial shares declined, with J.P. Morgan & Co. falling $1.125 to $88; Chase Manhattan Corp. slipping $1.25 to $75.875; and First Union Corp. dropping 62.5 cents to $64.875.
Housecall Medical Resources Inc. lost half its value after the home health-care company said it would report a loss in the fiscal fourth quarter. Its shares slid $7.25 to $7.25.
Among companies that rose, Sierra Semiconductor Corp. jumped $2.625 to $11.875 after the company said it would sell its modem chip line, a sign of a shakeout in that industry.
Structural Dynamics vaulted $4.625 to $27.25 after Ford Motor Co. said it would use the company's software around the globe to computer-test its cars. The order could be worth $200 million over five years.
Amtrol Inc. surged after it agreed to be acquired by Cypress Group, a private investment fund, for $218.9 million, or $28.25 a share. The water-treatment equipment maker rose $7.78125 to $27.328125.
BMJ Financial Corp. ascended $6.3125 to $20.3125 after Summit Bancorp. agreed to pay $164.5 million in stock, or $21.77 a share, for BMJ, a southern New Jersey thrift.
Starbucks Corp., the specialty coffee retailer that sells $3 Frappachinos, said same-store sales rose 9 percent in August. Its stock rose 87.5 cents to $33.
Systemsoft Corp. fell 62.5 cents to $31.375.
Pub Date: 8/30/96