Stocks tumble, Dow sheds 127 points Other indexes skid, Nasdaq drops 21; bonds are weak, too; Wall Street

THE BALTIMORE SUN

NEW YORK -- U.S. stocks sank with bonds yesterday as the Dow Jones industrial average skidded 127 points, snapping its streak of three consecutive 100-point gains.

"If the chart of this market were an EKG, I'd say the patient better go the hospital," said Stanley Nabi, vice chairman of Wood, Struthers & Winthrop Management in New York, which oversees $8 billion.

"Investors don't have any conviction. I don't think we're going into a bear market, but I believe we're on the threshold of the largest correction of the year."

"What is going on in the markets is this August choppiness," said Sykes Wilford, who helps guide accounts worth more than $2 billion at CDC Investment Management Corp. in New York. "We had some great days in equities, so people are going to sell. We won't get much of a pattern until September."

The Dow fell 127.28 points to 7,893.95. Almost 109 points of the decline came during computer-guided program trades, many in the final hour of trading, according to Birinyi Associates.

It was the Dow's first drop since Friday's 247-point, 3.1 percent slide, the worst in almost six years. The average has fallen 4.4 percent from its Aug. 6 peak, swinging at least 100 points during trading on every one of those days.

More than two stocks fell for every one that rose on the New York Stock Exchange, where trading totaled 4998 million shares, below the daily average of 523 million for the past three months.

Bonds declined for a second day as signs of strong growth raised inflation concern, even though price pressures remain dormant for now. The yield on the benchmark 30-year Treasury bond, which moves opposite to the price, rose 8 points to 6.62 percent.

The Standard & Poor's 500 index fell 14.30 to 925.05, led by MCI Communications Corp., which declined $6.125 to $30.5625 after British Telecommunications PLC suggested that it may withdraw its $23.7 billion takeover offer.

Sprint Corp. rose 31.25 cents to $47.75 as a possible breakup was seen easing competitive pressures. Bell Atlantic Corp. rose 56.25 cents to $75.3125.

The Nasdaq composite index fell 21.34 to 1,607.36, as computer-related companies such as Microsoft Corp., down $2.6875 to $137.875, handed back some of the past few days' gains.

Intel Corp. dropped $2.125 to $98.375, and Dell Computer declined 2.50 to 85.375.

Among broad market indexes, the Russell 2,000 index of small capitalization stocks lost 2.03 to 417.04; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq stock exchanges, dropped 111.37 to 8,835.17; the American Stock Exchange composite index slid .20 to 646.56; and the S&P; 400 mid-cap index skidded 2.37 to 312.28.

Wells Fargo & Co. led a retreat in banking shares, tumbling $13 to $254.50 in U.S. composite trading and closing at $260, down $7.50, on the New York Stock Exchange.

Other falling bank shares included Bank of New York Co., which slid $1.9375 to $46.8125 and SunTrust Banks Inc., off $1.875 to $61.625.

Consumer stocks, cherished by investors for their steady earnings, also retreated.

Procter & Gamble Co., whose brands include Tide detergent, fell $3 to $138.

Gillette Co., down 18 percent from its July 16 high, fell $1.4375 to $86.125.

Bucking the downtrend, shares of Ciena Corp., a maker of fiber-optic communication equipment, rose $2.1875 to $52.25 after third-quarter earnings topped the average forecast by 10 percent.

Guilford Pharmaceuticals Inc. jumped $3.625 to $28.875 after Amgen Inc. acquired rights to use its technique for treating degenerative nerve diseases such as Parkinson's, multiple sclerosis and Alzheimer's.

Sunglass Hut International Inc. dropped $1.375 to $8.0625 after posting second-quarter earnings 2 cents below the average forecast.

Pub Date: 8/22/97

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