NEW YORK -- U.S. stocks tumbled for a second day yesterday, sending the Dow Jones industrial average to its worst decline in a month, as money managers questioned how much more can be expected from the market in 1997.
The Dow industrials fell 92.75, to 6,927.38. The average had risen 9.6 percent for the year through Tuesday, about as much as it gains in a typical year.
Brokerages such as Merrill Lynch & Co. and Paine Webber Group Inc. were among the biggest losers, as investors speculated that the firms' profits would drop in a market rout.
Stock prices may already reflect even the most optimistic outlook for profits and economic growth in 1997, investors said. Wall Street is forecasting earnings growth of 13 percent for the Standard & Poor's 500 index this year, according to IBES International Inc. The index was up 10 percent for the year through Tuesday. The S&P; 500 fell 9.69 yesterday, or 1.19 percent, to 802.80.
The Nasdaq composite index fell 18.18, or 1.33 percent, to 1,347.40.
On the broader market, the Russell 2,000 index of small capitalization stocks fell 2.61, to 367.56; the Wilshire 5,000 index dropped 85.86, to 7,687.24; the American Stock Exchange composite index slid 1.72, to 597.43; and the S&P; mid-cap index lost 2.95, to 266.09.
About 490 million shares changed hands on the New York Stock Exchange with decliners outnumbering advancers by 2-to-1.
Brokerage stocks tumbled. Merrill Lynch lost $3.625, to $98.375; Morgan Stanley Group Inc. fell $2, to $69.875; Paine Webber dropped $2, to $34.875; and Bear Stearns Cos. lost $1.25, to $31.
Computer-related shares declined.
Intel Corp., the world's biggest chip maker, dropped $4, to $149.875 after Compaq Computer Corp. chose a Cyrix Corp. microprocessor to run its new low-cost personal computer. Cyrix rose $3.875, to $29.375.
Microsoft Corp. lost $2.25, to $95.25 and Compaq Computer Corp. lost $2.75, to $82.625.
A late-day rise in bond yields contributed to the stock decline yesterday.
The yield on the benchmark 30-year Treasury bond rose to 6.65 percent from 6.57 percent Wednesday, as reports on manufacturing and labor suggested the economy may be strong enough to accelerate inflation.
Citicorp lost $4.125, to $120.875; BankAmerica Corp. lost $3.125, to $117.75; and Bankers Trust New York Corp. fell $1.625, to $92.875.
Boeing Co. fell $2.375, to $107.50 after AMR Corp.'s American Airlines said it will delay deliveries of the first of more than 100 planes ordered from the aircraft manufacturer because of a dispute with its pilots union.
WellPoint Health Networks Inc. shares rose $1.625, to $38.875 after it reported fourth-quarter earnings almost quadrupled as membership in its managed health-care plans increased. Net income was 71 cents a share, above the average Wall Street forecast of 66 cents.
CompuServe Corp. rose 25 cents, to $10.75 after the online provider said its fiscal third-quarter loss narrowed more than expected from the year-earlier quarter. The No. 2 online service lost 15 cents a share, less than the 16 cents Wall Street expected.
Johnson Controls Inc. shares rose 62 1/2 cents, to $86, after the company said it had reached tentative contracts with the United Auto Workers that would end strikes at two seat plants.
Borland International Inc. rose 87 1/2 cents, to $7 after the software company said it would fire 300 workers, or 30 percent of its work force, in its second restructuring of the past four months.
Shares of food companies also bucked the trend. The S&P; food index of 13 companies jumped 0.6 percent, a move investors attributed to a conference in Naples, Fla., sponsored by the Consumer Analyst Group of New York.
Among the day's biggest gainers, Conagra Inc. rose $1, to $54.25; General Mills Inc. jumped $1, to $67.625; and Campbell Soup Co. rose 50 cents, to $89.
Pub Date: 2/21/97