NEW YORK -- U.S. stocks were mixed yesterday as economically sensitive shares fell amid concern that higher interest rates could slow the economy's pace and pinch earnings. Coca-Cola Co. and PepsiCo Inc. led gainers.
Caterpillar Inc., Aluminum Co. of America and Exxon Corp. led the Dow Jones industrial average 6.66 points lower to 5,727.18.
Rising stocks outnumbered those that fell by 1,189 to 1,167 on the New York Stock Exchange, where 372.96 million shares were traded.
Stocks received no help from the bond market. The yield on the benchmark 30-year Treasury bond rose 3 basis points to 7.11 percent after Federal Reserve Gov. Janet Yellen told Reuters that the economy has entered "an inflationary danger zone."
The Nasdaq composite index eked out a 0.72-point advance to close at 1,149.43, and the S&P; 500 index was little changed, rising 0.05 to 663.81. The Russell 2,000 index of smaller shares rose 0.65 to 336.28; the Wilshire 5,000 index added 6.60 to 6,522.11; the American Stock Exchange market value climbed 3.27 to 565.23; and the S&P; mid-cap index rose .06 to 232.66.
General Motors Corp. cut its fourth-quarter production schedule, and GM shares fell 37.5 cents to $47.875 on the prospect of weaker earnings.
Ford shares fell $1.875 before rebounding to $31.625, down 25 cents, after the No. 2 U.S. car and truck maker said its second-half loss in Brazil would almost double to $250 million from $129 million in the first half because of slowing truck sales and difficulties launching its Fiesta model. Chrysler Corp., the No. 3 U.S. automaker, fell 37.5 cents to $28.375.
Soft drink maker and fast-food franchiser PepsiCo benefited from speculation of slowing growth, because sales of Pepsi and Taco Bell tacos are likely to grow regardless of swings in the economy.
Prudential Securities Inc. reiterated Pepsi's "buy" rating yesterday, and Donaldson Lufkin & Jenrette Securities Corp. rated it a new "outperform."
Pepsi rose 75 cents to $29.50. Rival Coca-Cola gained 62.5 cents to $52.375.
ITT shares slumped after the hotelier said higher costs from speeding up casino construction in Las Vegas and lucky bets made at baccarat tables at Ceasar's Palace will reduce earnings starting in the third quarter. ITT fell $7.75 to $48.25, its weakness spilling over into other casino shares.
Hilton Hotel Corp. dropped $1.375 to $104.75. Trump Hotels & Casino Resorts Inc. slipped 50 cents to $22.875.
Anchor Gaming and International Game Technology, two casino game makers, both rose after announcing a marketing partnership to distribute Anchor's Wheel of Gold. Anchor soared $5.50 to $58.25, and IGT rose 50 cents to a 52-week high of $20.875.
Gap Inc. jumped $1.125 to $31.625 after Goldman, Sachs & Co. added the retailer to its "priority list."
Shares of Iomega Corp. added $2.125 to $15.4375 after the company agreed to let its Zip disk drive be built and sold by Matsushita Communication Industrial Co.
Heinz Co. rose $1.25 to $33 after the company said it may sell some of its less-profitable businesses and focus on selling food products. Heinz also boosted its quarterly dividend by 9.4 percent.
Pub Date: 9/11/96