NEW YORK -- U.S. stocks fell yesterday, led by Mattel Inc. and computer companies, as the economy slows and hundreds of companies are warning that earnings will not meet expectations.
Mattel tumbled $8.125, to $22, its biggest decline in 16 years, after it became the latest in a string of companies to warn of a profit shortfall. The drop shaved $2.5 billion from Mattel's market value. The world's biggest toy maker was the most active stock in U.S. trading, and the biggest loser in the Standard & Poor's 500 index.
Mattel also said it will buy the Learning Co., an educational software maker, for $3.8 billion in stock, or $33 a share, a 17 percent premium over Friday's closing price. Learning Co. fell $3.3125 to close at $25.
The Dow Jones industrial average fell for a fifth session, dropping 126.16, or 1.4 percent, to a six-week low of 8,695.60. International Business Machines Corp., which fell $5.125, to $162.875, sliced 23 points from the Dow average. J. P. Morgan & Co. lost $3.4375, to $97.0625, trimming 14 points more.
The S&P; 500 fell 25.26, or 2.2 percent, to 1,141.20.
Microsoft Corp. and other computer-related companies, which have performed the best this year, slumped, dragging the technology-dominated Nasdaq composite index down 62.39, or 3.1 percent, to 1,966.92, its biggest loss this month.
Still, the Nasdaq composite is up 25 percent for the year. The S&P; 500 is up 18 percent for the year and the Dow is up 10 percent.
Investors also were concerned that the impeachment proceedings against President Clinton may hobble his leadership of the world's largest economy. The Dow industrials have lost 678 points since setting a record Nov. 23.
Elsewhere on the broad market, the Russell 2,000 index of
small-capitalization stocks fell 7.43, to 387.94; the Wilshire 5,000 XTC index plummeted 220.21, to 10,423.37; the American Stock Exchange composite index slumped 9.77, to 647.99; and the S&P; 400 midcap index lost 6.73, to 344.12.
The Sun-Bloomberg Maryland index of the top 100 Maryland stocks sank 3.03, to 187.66.
Three stocks fell yesterday for every one that rose on the New York Stock Exchange.
Some local telephone companies fell as the Federal Communications Commission considered whether to block Bell Atlantic Corp.'s $79 billion acquisition of GTE Corp. and SBC Communications Inc.'s $79 billion purchase of Ameritech Corp.
Bell Atlantic slid $1.1875, to $53.50; GTE dropped $1.1875, to $63.1875; SBC lost $1.8125, to $48; and Ameritech fell $1.625, to $56.625.
Microsoft lost $6.0625, to $127.9375; Intel Corp. dropped $4.875, to $111.5625; and Dell Computer Corp., the S&P; 500's biggest gainer this year, slid $2.4375, to $64.75.
Visual Networks Inc.'s stock fell 9 percent yesterday, dropping $3.0625 to close at $30.78, after it was downgraded by an influential equity research firm. Stephen Koffler, an analyst at Donaldson Lufkin & Jenrette Securities Corp. in New York, demoted the Rockville communications systems company from a "buy" rating to a "market perform" over concerns that network equipment giant Cisco Systems Inc. will soon introduce products that compete with Visual Networks' offerings.
New England Electric System rose $5.25, to $48.25, after it agreed to be acquired by Britain's National Grid Group PLC for $53.75 a share, valuing the utility at $3.2 billion, a 25 percent premium to its closing share price of $43 Friday.
Getchell Gold Corp. soared $11.6875, to $27.875, after Placer Dome Inc. said it will buy the Denver-based gold-mining company for about $1.09 billion in stock, or $34.45 a share, a premium of 113 percent to its closing price Friday. Placer Dome fell $1.75, to $12.3125.
Nike Inc. jumped $2.125, to $38.125, after Salomon Smith Barney analyst Faye Landes said the stock may rise to $50 within 12 months. She raised her recommendation on the athletic apparel maker to a "buy" from "neutral."
Pub Date: 12/15/98