Dow falls 9 as Nasdaq climbs to new high GM and oil shares pull blue chips lower; Microsoft zips to a record


NEW YORK -- U.S. stocks were mixed yesterday, as a decline in oil shares tempered a rally in Microsoft Corp. that propelled the Nasdaq composite index to its fourth straight record.

The Nasdaq, packed with computer-related shares, rose 22.49, or 1.2 percent, to 1,965.53, amid predictions that computer company profits are poised to pick up.

The Dow Jones industrial average fell 9.53 to 9,096.21, dragged down by General Motors Corp. The Standard & Poor's 500 index rose .86 to 1,165.19.

Among other broad indexes, the Russell 2,000 index of small capitalization stocks rose .32 to 458.75; the Wilshire 5,000 index gained 13.06 to 10,929.28; the American Stock Exchange composite index slid .19 to 730.47; and the S&P; 400 midcap index fell .22 to 368.64.

The Sun-Bloomberg Maryland index, which tracks the top 100 Maryland stocks by market valuation, gained .22 to 231.78.

Decliners outnumbered advancers by a 4-to-3 margin on the New York Stock Exchange. About 571 million shares changed hands on the NYSE, below the three-month average of 604 million.

The S&P; 500 was little changed, but some huge companies set records. Among pharmaceutical companies, Merck & Co. gained $2.375 to $134.875 and Pfizer Inc. rose 87.5 cents to $118.6875. Time Warner Inc. gained $2.75 to $89.75. Merrill Lynch & Co. rose $1.75 to 107.$9375.

Microsoft rose $4.375 to a record $117.5625, on optimism that the No. 1 personal computer software company will report profit Thursday that tops analysts' forecasts.

Linear Technology Corp., which makes integrated circuits, gained $2.0625 to $68.75. VLSI Technology Inc., another chip maker, rose 93.75 cents to $18.5625.

After the market closed, AlliedSignal Inc. said its second-quarter net income rose to 61 cents a share, a penny better than forecasts. The aerospace and chemicals company, one of the 30 Dow industrials, fell 75 cents to $43.125 before the report.

Oil shares, led by Exxon Corp., fell on speculation that output cuts from the Organization of Petroleum Exporting Countries and other producers will take months to eat into a global surplus. Exxon dropped $1.1875 to $70.50. Rowan Cos., a drilling company, lost $1.3125 to $17.4375.

General Motors fell $2.3125 to $68.875, accounting for all but about a point of the Dow's decline, on low prospects for a strike settlement.

Chrysler closed unchanged at $56.1875 yesterday after the No. 3 U.S. automaker reported second-quarter net income of $1.51 a share, 10 cents better than analyst forecasts.

Applied Materials Inc. declined 93.75 cents to $28.5625 after the world's largest maker of semiconductor manufacturing equipment warned of disappointing earnings.

Cendant Corp. fell $3.125 to $18.875 and was the biggest loser in the S&P; 500, on concern that the marketing and franchising company's audit of its discount shopping clubs will be delayed.

Internet stocks soared. Inc., up 186 percent in a week, rose $4.6875 to $26.125 amid optimism that the former software retailer's move to the Internet will boost sales. Yahoo! Inc. climbed $7.125 to $188.375 and Excite Inc. rallied $6.75 to $88.625.

E Trade Group Inc. soared $10, or 41 percent, to $34.50 after Japan's Softbank Corp. agreed to pay $400 million for 27.2 percent of the Internet brokerage.

McDonald's Corp. rose 56.25 cents to $73.625 after Morgan Stanley Dean Witter & Co. analyst Howard Penney raised earnings estimates for the restaurant chain. Citing strong U.S. revenue growth, Penney raised profit estimates for the fiscal year to $2.52, from $2.50.

Gillette Co. fell $1.5625 to $61 after a Barron's cover story quoted investors who expect Gillette earnings growth to slow to 8 percent or 9 percent from 16 percent in 1997.

Pub Date: 7/14/98

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