The Dow Jones industrial average, up 10 percent for the year just over three weeks ago, bounced back from an 86.49-point decline and finished the day down 39.66, at 6,477.35 -- little more than 30 points over where it started 1997.
"Interest rates may be headed higher, and we're seeing a lot of companies reporting disappointing earnings," said Roland Machold, who oversees $56 billion as the director of the New Jersey Division of Investment.
Exxon Corp. led yesterday's decline. Stocks have been sliding since the U.S. central bank raised interest rates nine days ago in the first rate increase since February 1995. Investors are concerned that increases could crimp consumer and corporate borrowing and hurt company profits.
An unexpectedly strong reading from the government's monthly jobs report, to be released today, would make it more likely that the Fed could bump interest rates higher at a policy meeting next month.
Overcoming early losses, the Standard & Poor's 500 index rose 0.21 to 750.32 and the Nasdaq composite index rose 12.76 to 1,213.77, helped by gains in Microsoft and Intel.
The Russell 2,000 index of small capitalization stocks lost 1.41 to 336.38; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq exchanges, dropped 3.06 to 7,137.61; the American Stock Exchange composite index fell 3.37 to 557.82; and the S&P; midcap index added .08 to 249.22.
IBM fell $2.625 to $131.125, amid concern that slow demand in Europe and a stronger dollar mayl eat into first-quarter earnings. IBM is to release first-quarter results April 23.
Many other computer-related shares finished higher. Cisco Systems Inc. climbed 87.5 cents to $48.375; Intel gained $3.625 to $140.625; and Microsoft rose $3.50 to $95.125.
Oil shares slid, a day after the price of crude fell below $20 a barrel. Exxon lost $2.50 to $102.25; Chevron Corp. fell $2.375 to $64.625; and Mobil Corp. fell $3.875 to $125.
Some 1,585 stocks fell and 923 rose on the New York Stock Exchange, where 498 million shares traded. The three-month daily average is 510 million shares.
Advanced Micro Devices Inc. fell $1.50 to $38. On Wednesday, it introduced its K6 chip, which it hopes will boost earnings and help it compete better against industry leader Intel.
Apple Computer Inc. rose 87.5 cents to $18.875, after reports that the computer maker is seeking a friendly merger partner. An executive who does business with Apple said the company was again in talks with Sun Microsystems Inc., which considered acquiring it last year.
Lucent Technologies Inc. rose $1.75 to $52 after it said it expects second-quarter earnings to be more than double analysts' estimates because of strong sales of its software and wireless communications products.
Broadcasting shares were higher after the Federal Communications Commission voted to give digital licenses to the nation's 1,600 TV stations. The Walt Disney Co., parent of ABC Television, gained 25 cents to $72.625; General Electric Co., which owns the National Broadcasting Co., rose 62.5 cents to $98.375. Westinghouse Electric Corp., parent of CBS, was unchanged at $18.50.
Pub Date: 4/04/97