Stocks fall, with Dow tumbling 159 points Slumping yen causes worry about trade with Asia; Wall Street


NEW YORK -- U.S. stocks fell for a second day on concern that the economy will slow, as a slumping Japanese yen signaled a prolonged period of weak demand in Asia for U.S. goods.

American Express Co., United Technologies Corp. and oil shares led the drop.

With the yen at an eight-year low against the dollar, investors said other Asian countries may let their currencies fall so their exports can remain competitive, making U.S. goods more expensive throughout the region.

The Dow Jones industrial average dropped 159.93, or 1.78 percent, to 8,811.77, its second-biggest drop this year. The Standard & Poor's 500 index lost 17.70, or 1.59 percent, to 1,094.58, and the Nasdaq composite index declined 23.50 to 1,749.75, a loss of 1.33 percent.

Among other broad market indexes, the Russell 2,000 index of small capitalization stocks fell 6.73 to 444.35; the Wilshire 5,000 index plummeted 154.24 to 10,300.65; the American Stock Exchange composite index dropped 7.80 to 699.05; the NYSE composite index lost 8.87 to 565.50; and the S&P; 400 midcap index slid 4.31 to 353.67.

The Bloomberg Maryland index, which tracks the top 100 stocks in Maryland by market valuation, lost 1.98 to 228.91.

Declining stocks led advancers by a ratio of more than 3 to 1 on the New York Stock Exchange, and 28 of the 30 stocks in the Dow industrials fell. Volume on the Big Board totaled 604 million shares.

The 30-year bond yield fell 5 basis points to 5.65 percent, the lowest level since the government began regular sales of the bonds in 1977. Bonds rallied on expectations that Asia's economic turmoil will curb U.S. inflation and keep the Federal Reserve from raising interest rates.

American Express Co. fell $3.625, or 3.4 percent, to $104.0625. The company took a charge at its private bank in the first quarter for losses in Asia.

United Technologies, which sells Otis elevators to Asia's skyscraper builders, fell $2.375 to $84.875.

Oil shares sank as crude oil prices fell to approach a 9 1/2 -year low on skepticism that production cuts will be enough to offset a worldwide supply glut and slowing demand in Asia.

Atlantic Richfield Co. tumbled $2.9375 to $77.25 and British Petroleum PLC lost $3 to $84.9375. Exxon fell 75 cents to $68.0625.

Companies that provide drilling services and equipment tumbled too. Schlumberger Ltd. fell $2.875 to $70.8125; Dresser Industries Inc. lost $2.625 to $40.875; and Halliburton Co. slid $2.4375 to $42.25. The Philadelphia Stock Exchange's oil service sector index fell 4 percent and is down 26 percent since May 1.

Aetrium Inc., a maker of semiconductor testing equipment, fell $3.9375 to $7.5625 after saying second-quarter earnings will be "significantly below" analysts' estimates because of fewer orders.

Sawtek Inc. $8.9688 to $13.2813 after the maker of wireless telecommunications components warned that posting profit growth for the fiscal fourth quarter ending Sept. 30 will be difficult because of economic troubles in Asia and South Korea.

DuPont Co., a chemical and oil producer, fell $2.125 to $75 after analyst James Wilbur at Salomon Smith Barney Inc. cut his second-quarter earnings estimate for the chemical company to $1.03 a share from $1.10, his estimate for the year to $3.74 from $3.81. Wilbur cited the strength of the dollar, slower chemical-volume growth and weak earnings at DuPont's Conoco unit.

The dollar climbed 3.48 yen to 144.05 yen, its highest level since September 1990. The Japanese currency's weakness helped send Japanese stocks down 2.12 percent to a six-month low earlier yesterday, and benchmark stock indexes in most other Asian countries sank.

Adflex Solutions Inc. fell $2.50 to $8.50 after the maker of flexible electronic interconnect products said it will report a loss in the second quarter instead of the profit of 35 cents a share average estimate of seven analysts surveyed by IBES International Inc. The company said it was hurt by weak demand for hard disk drive products and increased price competition.

Allmerica Financial Corp. lost $4.6875 to $66.75 after the insurer said recent storms in Michigan and the Northeast caused it and its Citizens Corp. unit $25.3 million in second-quarter losses. Citizens dropped $1.25 to $30.625.

Gold stocks fell after Doug Cohen, an analyst at Morgan Stanley Dean Witter & Co., cut his 1998 estimate for gold to $305 an ounce from $320 and reduced his 1999 forecast to $330 from $340. Gold futures slumped $6.40 an ounce to $288.70.

Pub Date: 6/12/98

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