NEW YORK -- U.S. stocks fell from records yesterday as shares of paper and other economically sensitive companies dropped on concern that profits will lag. Drugmakers, whose earnings tend to grow steadily, gained the most.
International Paper Co. and Champion International Corp. were among the day's biggest decliners after the companies said third-quarter profits tumbled. While the earnings matched or exceeded estimates, expectations have been steadily revised lower, and some investors said there's no relief in sight.
The Dow Jones industrial average fell 13.04 to 5,966.77, amassing most of the loss in the last half hour of trading. Earlier, the 30-stock average rose to an all-time high of 6,010.00. It was the second straight day that the Dow briefly ventured above 6,000.
The Standard & Poor's 500 index dropped 2.70 to 700.64, also succumbing to a late-day decline. Monday's all-time closing high of 703.38 was the index's fifth record in six days. The Nasdaq composite index fell 10.72 to 1,240.15, one day after setting its first record since June 5.
The Russell 2,000 index of small capitalization stocks fell 1.47 to 347.36; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq stock exchanges, dropped 28.47 to 6,868.92; the American Stock Exchange market value index slid 0.21 to 582.01; and the S&P; midcap index fell 1.71 to 243.87.
Disappointing third-quarter earnings from Motorola also hurt stocks. For the third quarter in a row, the cellular phone and chip company reported profit that failed to meet or exceed expectations. Its stock fell $1 to $48.75.
About 1,393 stocks fell and 1,032 gained on the New York Stock Exchange, where about 435.1 million shares traded. The three-month daily average is 384 million shares.
The S&P; paper stock index tumbled 25.96 to 1,086.55. Champion International's stock slid $2.75 to $42.875 after it said profit fell 86 percent in the third quarter, while International Paper slid $1 to $41.625 after it said net income dropped 66 percent.
The Morgan Stanley cyclical index of 30 economically sensitive stocks dropped 3.28, or 0.87 percent, to 373.91.
Aluminum Co. of America, which last week reported a 42 percent drop in profits, fell $2 to $56.375. Mining company Phelps Dodge Corp. slid $1.375 to $62.50; Goodyear Tire & Rubber Co. dropped 75 cents to $45 and chemical maker Union Carbide Corp. dropped 50 cents to $44.625.
The Amex pharmaceutical index rose 0.71 to 348.31. Merck climbed $1.125 to $71.50; Pfizer leaped $1.625 to $80.875; Schering-Plough Corp. rose 87.5 cents to $63.875; and Pharmacia & Upjohn Inc. gained 50 cents to $42.375.
The Semiconductor Industry Association's closely watched book-to-bill ratio for September, released after the close of trading, rose to 0.99 from a revised 0.93 in August, meaning that for every $100 worth of goods shipped last month, the industry took in $99 worth of new orders. Analysts expected 0.98. It was the highest reading since December.
The Philadelphia semiconductor index rose 1.01 to 190.3. LSI Logic Corp. rose 87.5 cents to $24.125; Texas Instruments Inc. gained 87.5 cents to $55.125; and Micron Technology Inc. jumped $1.125 to $32.375.
Intel Corp., whose semiconductors are used to power about 85 percent of the world's personal computers, was absent from the rally, falling $3.125 to $101.625. Erika Klauer, an analyst at Salomon Brothers Inc., cut her rating on the stock to "hold" from "strong buy."
Shares of Total-Tel USA Communications Inc. rallied $1.75 to $22.25. Chairman Warren Feldman said the company has its own network in place that lets it charge prices 40 percent less than AT&T; Corp.'s most recent price, according to Investor's Business Daily.
Shares of Sherwin-Williams Co. rose $1 to $49. The paint maker said it bought closely held Chilean paint producer Stierling Group.
Pub Date: 10/09/96