NEW YORK -- U.S. stocks fell as Minnesota Mining & Manufacturing Co. said its fourth-quarter earnings will be disappointing because a rising dollar hurt overseas profit.
The warning overshadowed the dollar's decline yesterday, which was sparked by a Japanese move to shore up the yen. The U.S. currency is still up 10 percent against the yen and as much as 55 percent against other Asian currencies this year, and that is cutting into U.S. corporate profits from overseas.
"You have a market that doesn't know how severe Asia's problems are," said James Weiss, deputy chief investment officer for equities at State Street Research & Management in Boston, which oversees $48 billion. "Investors are desperately searching for information that will unlock this puzzle, and rotating from sector to sector."
The Dow Jones industrial average fell 18.90 to 7,957.41. 3M, the sixth most heavily weighted of the average's 30 stocks, fTC accounted for the entire drop. Hurt by the losses in Asian currencies, the maker of Scotch tape tumbled $9 to $84.875 after disclosing that the weaker currencies overseas will trim its fourth-quarter earnings by 10 percent.
The dollar fell as much as 4.3 percent against the yen, after having risen to a 5 1/2 -year high against it in recent days on concern that Japan would fall into a recession.
The Standard & Poor's 500 index fell 2.50 to 965.54 yesterday, and the Nasdaq composite index lost 5.63 to 1,547.37.
Among other broad market indexes, the Russell 2,000 index of small capitalization stocks added 1.10 to 426.44; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq stock exchanges, slid 8.24 to 9,211.27; the American Stock Exchange composite index added 2.40 to 671.28; and the S&P; 400 mid-cap index gained 0.35 to 324.59.
Barrick Gold Corp. gained, helped by expectations that a recovery in Japan would stimulate demand for bullion. Japan is the fifth largest gold buyer, using the metal mainly to make jewelry. Barrick rose $1.4375 to $18.50. The Standard & Poor's gold index, which measures the performance of the gold mining sector, soared 9 percent.
AT&T; Corp. rose $1 to $57.875 and Citicorp gained $2 to $131.50. AT&T;'s board is expected to approve Citicorp's $4 billion offer yesterday to buy its Universal Card unit, people familiar with the transaction said.
Cisco Systems Inc. rose 68.75 cents to $54.1875 after a 3-for-2 stock split. Cisco was raised to "recommend list" from "market outperform" by analysts Ajay Diwan and Mary Henry at Goldman, Sachs & Co.
Centocor Inc. dropped $6.375 to $31.50, after it said its 1997 earnings would fall short of estimates because the company hasn't yet found a partner for one of its top experimental drugs. The Malvern, Pa.-based company said it expects to report 1997 earnings, excluding a second-quarter charge stemming from the sale of a U.K. facility, of 20 cents a share. Analysts had expected 51 cents a share.
Polaroid Corp. rose $1.1875 to $44.1875, a day after the photography company said it will cut 15 percent of its work force and sell a chemical plant to reduce costs and boost its profit, resulting in a fourth-quarter pretax charge of $310 million.
BT Office Products International Inc. fell $1.0625 to $7.375 after it said upgrading its computer systems will require a $1 million fourth-quarter charge and hurt earnings in 1998 and 1999, as it struggles for efficiency and profits. The stock has lost almost two-thirds of its value since May 1996.
NextLevel Systems Inc. soared $2.875 to $17.875. NextLevel said it won $4.5 billion of orders from nine cable-television operators for the new generation of boxes that will link homes to digital television, the Internet and other new services.
Ameritech Corp. soared $3.125 to $81.125, after the telecommunications company said its board authorized the buyback of as much as $2 billion of its common stock and approved a 2-for-1 stock split.
Pub Date: 12/18/97