NEW YORK -- U.S. stocks were mixed yesterday, as a rally in computer issues was offset by concern that current stock prices may not be justified by expected earnings for U.S. companies.
Dell Computer Corp., Intel Corp. and other computer stocks rose as investors who are optimistic about the outlook for the industry snapped them up after Monday's slide.
Cisco Systems Inc. led a surge in computer networking stocks after Sprint Corp. said it will use Cisco products in a new phone network.
The Dow Jones industrial average fell 31.13 to 8,891.24 in a late-day slide, led by Boeing Co. after an unfavorable court ruling in the TWA Flight 800 liability case.
Boeing fell $1.75 to $45.875 after losing an attempt to limit potential legal damages to the economic loss resulting from the deaths of the 230 people aboard TWA Flight 800.
The Standard & Poor's 500 index rose 2.05 to 1,093.03, and the Nasdaq composite index climbed 14.97 to 1,761.79.
Among other broad market indexes, the Russell 2,000 index of small capitalization stocks lost 1.47 to 449.70; the Wilshire 5,000 index gained 20.87 to 10,300.77; the American Stock Exchange composite index fell 1.21 to 706.30; and the S&P; 400 midcap index added 0.70 to 355.27.
The Bloomberg Maryland index, which tracks the top 100 stocks in Maryland by market valuation, slipped 0.03 to 227.50. Declining stocks outnumbered advancers by a 15-to-14 margin on the New York Stock Exchange. Big Board trading totaled 594.9 million shares, below the daily average of 611.7 million shares over the last three months.
Cisco rose $2.875 to $76.4375 after Sprint's announcement. Among its competitors, Lucent Technologies Inc. rose $2.75 to $71.6875 and Bay Networks Inc. gained $1.3125 to $27.8125.
Dell Computer jumped $4.3125 to $82.625, after dropping 5 percent Monday, and Intel rose $1.25 to $69.25, recouping some of Monday's 4.8 percent slide. Those two stocks were the most active in U.S. trading for a second day.
Oracle Corp. gained $1.5625 to $24.375 and Microsoft Corp. jumped $1.75 to $85.50.
General Motors Corp. rose $1.875 to $73, the biggest gainer in the Dow industrials, and Ford Motor Co. jumped $4.125 to 57 as investors bought before the companies report May sales results today. Chrysler Corp., which yesterday reported a 27 percent sales increase over May 1997, gained 12.5 cents to $56.
Burlington Northern Santa Fe Corp. fell $2.5625 to $95.75 after Merrill Lynch & Co. analyst Michael Lloyd said federal regulators are weighing a change in policy that could lead to lower freight rates for railroads.
Lloyd cut his long-term ratings on Burlington Northern, Union Pacific Corp., CSX Corp. and Norfolk Southern Corp. from "buy" to "accumulate." Union Pacific fell $1.125 to $45.25; CSX lost $1 to $46.25; and Norfolk Southern dropped 31.25 cents to $31.
Vesta Insurance Group Inc. tumbled $24.9375, or 47 percent, to $27.75. The property and casualty insurer said that it's investigating possible accounting irregularities, and that Robert Huffman had resigned as president and chief executive.
American Home Products Corp. fell $1.25 to $48, a day after the company agreed to merge with Monsanto Co. in a stock swap transaction that will depress American Home's earnings by up to 15 percent in the year in which it is completed.
Big international banks gained after markets in Japan and Russia recovered from Monday's losses. Chase Manhattan Corp. rose $2.875 to $136.9375 and Citicorp rallied $2.875 to $155.875.
Avon Products Inc. recovered much of a 9 percent decline that came after the cosmetics company told analysts that China's ban on direct sellers will result in lower-than-expected sales. Avon fell $1.75 to $79.5625.
Market indexes were left little changed since the end of the first quarter as traders and investors debated how much Asia's slowing economies and weak currencies will cut U.S. corporate profits.
The debate makes for intraday swings such as yesterday's, when the Dow rose 54 points in early trading, slipped 40 points, recovered to a gain of about 20 points and then tumbled to a loss of 31. Much of the movement yesterday was driven by computer-guided buy and sell orders, according to Birinyi Associates, a Greenwich, Conn., research firm.
The concern about corporate profits is countered by low interest rates, the flow of money into the market from individual investors in the United States and overseas investors seeking a haven from the slumping economies of Asia, traders say.
Pub Date: 6/03/98