Renewed fear over Asia sends stocks down Dow tumbles 47.40, its first drop in 4 days; Avon, oil service shares fall


NEW YORK -- U.S. stocks fell yesterday for the first time in four days amid lingering concern that slowing Asian economies will cut U.S. corporate profits. Avon Products Inc. plunged after warning of lower overseas earnings.

The Dow Jones industrial average fell 47.40 to 7,650.82, after rising 4 percent in the last three days. The Standard & Poor's 500 index fell 7.97 to 938.23. The Nasdaq composite index lost 13.67 to 1,600.44.

Schlumberger Ltd. and other oil field service and equipment stocks, some of this year's best-performing shares, tumbled the most as investors sold them in favor of other shares with more potential for gains.

Among other broad market indexes, the Russell 2,000 index of small capitalization stocks lost 3.52 to 432.13; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq stock exchanges, dropped 68.10 to 9,027.07; the American Stock Exchange composite index slipped 7.79 to 671.21; and the S&P; 400 midcap index slid 2.48 to 319.79.

About 528 million shares changed hands on the New York Stock Exchange, below the recent daily average of 537 million shares. Declining issues led advancers by about 3 to 2.

Avon fell $5 to $57.50 after the direct marketer of cosmetics said fourth-quarter earnings won't meet analysts' estimates because of lower-than-expected sales in Brazil, China and Japan. The company cited tighter regulatory controls in China and concern among Brazilian consumers about their nation's economy.

Household products maker Colgate-Palmolive Co., which also has a large chunk of business in Brazil, fell $2.3125 to $63.9375.

Oil service stocks slumped. Schlumberger fell $4.5625 to $83.625; Smith International Inc. lost $4.6875 to $67.4375; and Cooper Cameron Corp. fell $4.50 to $65. The Philadelphia Stock Exchange oil service sector index, up 50 percent this year, declined 5.4 percent.

Analysts offered several explanations for the drop, including concern about increased supplies of oil from the Middle East, which would curtail drilling activity elsewhere.

AT&T; Corp., one of the 30 Dow industrials, rose $3.75 to $52.375 after Lehman Brothers analyst Blake Bath reiterated a "buy" rating on the stock, with a 12-month price target of $72 a share. Bath said that after meeting with company executives, he's convinced AT&T; will take steps to cut expenses and make a key acquisition.

Hewlett-Packard Co., another of the Dow industrials, fell 62.5 cents to $61.625. The company said it may close some plants, after missing Wall Street's earnings estimates because of higher-than-expected expenses. The computer and printer maker fell short of expectations for a third quarter in a row.

Walt Disney Co., also a Dow stock, rose 25 cents to $89.25 after the media and entertainment company said it earned 60 cents a share in its fourth quarter ended Sept. 30, up from 49 cents a year earlier and in line with analyst estimates. The stock rose 7.1 percent in the last three sessions in anticipation of strong earnings.

Pub Date: 11/19/97

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