NEW YORK -- U.S. stocks fell yesterday for a second day, led by Sears, Roebuck & Co., as concern grew that the Federal Reserve may raise interest rates in May for the second time this year.
Semiconductor and bank shares fell. Drug and tobacco stocks, which declined Wednesday, gained yesterday.
The Dow Jones industrial average -- down more than 500 points from its peak a month ago -- fell 23.79 to 6,540.05. Merck & Co., which fell $3.75 yesterday, rose $2.125 to $83.625 to lead gainers among the Dow industrials.
Declining Dow stocks were led by Sears, which fell $3.625 to $47.25, after it said it will make voluntary payments for past bankruptcy collection practices.
Also sliding were DuPont Co., down $2 to $102.375 and Chevron Corp., down 75 cents to $64.50. The Standard & Poor's 500 index fell 2.27 to 758.33, and the Nasdaq composite index slumped 13.68 to 1,235.75.
About 13 stocks fell for every 11 that rose on the New York Stock Exchange.
Semiconductor shares slid amid concern that Intel Corp. may unveil aggressive price cuts on its microprocessors at the end of the month, which could be steeper than those of the past few quarters. Intel fell $5 to $137.25; Texas Instruments Inc. dropped $3.625 to $82.625; and Xilinx Inc. dropped $3.3125 to $46.875.
Paper stocks rose, led by Georgia-Pacific Corp., which climbed $1.625 to $73 after reporting profit from operations of 11 cents a share, more than double analysts' forecasts. International Paper Co. rose 62.5 cents to $41; Weyerhaeuser Co. gained 25 cents to $44.875; and Champion International Corp. increased 50 cents to $43.75.
Banks were among the biggest losers. Citicorp fell $2.75 to $110.125; Chase Manhattan Corp. dropped $1.375 to $94.125; BankAmerica Corp. was off 87.5 cents at $105.625; and First Union Corp. slid 75 cents to $81.875.
The Standard & Poor's 500 financials index has fallen 11 percent since the Fed raised rates a quarter-point last month on overnight loans between banks.
The Russell 2,000 index of small capitalization stocks lost 1.57 to 345.16; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq exchanges, dropped 30.47 to 7,238.13; the American Stock Exchange composite index climbed 0.21 to 563.19; and the S&P; midcap index slid 1.53 to 253.76.
Footstart Inc. fell $2.75 to $24.875 after the athletic footwear retailer said it expects its fiscal first-quarter net income will be 13 cents to 16 cents a share, higher than analysts' estimates of 6 cents to 7 cents.
General Electric Co. fell 37.5 cents to $101.50 after reporting first-quarter net income of $1.02 a share, matching estimates. The Fairfield, Conn., conglomerate said net income rose to $1.68 billion, up from $1.52 billion a year earlier.
Auto stocks were little changed after Chrysler Corp. said it earned $1.45 a fully diluted share, 2 cents better than forecasts. Chrysler was unchanged at $30. Ford Motor Co., which raised its dividend to 42 cents a share from 38.5 cents, fell 25 cents to $32.625. General Motors Corp. was unchanged at $54.50.
First Bank System Inc. fell 37.5 cents to $74.125, after the nation's 25th-largest bank said first-quarter earnings rose to $1.27 a share, a penny below Wall Street estimates.
Williams Cos. rose 50 cents to $47 and Northern Telecom Ltd. fell 50 cents to $65.875 after the two companies agreed to combine their telecommunications distribution units into one company, creating a bigger competitor for Lucent Technologies Inc. Lucent rose 37.5 cents to $53.
Yahoo! Inc. fell $1.75 to $32.6875, after the Santa Clara, Calif.-based Internet navigational guide provider reported net income of 1 cent a share. Analysts forecast a loss of 3 cents a share.
Shares of Compaq Computer Corp. fell $2.75 to $75.375 after it said it reached a definitive agreement to purchase Microcom Inc., a Massachusetts-based maker of remote access technology products, for about $280 million. Microcom rallied $5.4375 to $15.9375.
Safeway Inc. fell $4.125 to $43.875 after the company reported lower gross profit amid fears that a strike at Canadian stores may lower future earnings.
PairGain Technologies Inc. shares fell $4.125 to $25.75 after the company reported profit of 19 cents a share -- 2 cents higher than forecasts but disappointing to some analysts.
Pub Date: 4/11/97