NEW YORK -- U.S. stocks were mixed yesterday. The Dow Jones industrial average recovered almost all of a 118-point plunge as banking and computer shares rallied, while concern that profit won't justify big gains depressed most shares.
Many traders were expecting a large decline yesterday after Abby Joseph, strategist for Cohen Goldman, Sachs & Co., and Federal Reserve Vice Chairman Alice M. Rivlin warned that stocks may have risen too far, too fast, and Brazil's budget crisis is worsening. When a plunge failed to stick, investors took heart.
The Dow average fell for the first time in three days, dropping 7.21 to 9,537.76, and the Standard & Poor's 500 index lost 2.61 to 1,269.73.
The Nasdaq composite index rose 5.23 to 2,326.09, its fifth straight record, led by Amazon.com Inc., Cisco Systems Inc. and Yahoo! Inc.
Citigroup Inc., the parent of Salomon Smith Barney Inc., jumped $4.125, to $58.50, adding 17 points to the Dow average, and J. P. Morgan & Co. rose $1.75, to $113, after rivals Morgan Stanley Dean Witter & Co. and Lehman Brothers Holdings Inc. reported better-than-expected fourth-quarter earnings.
The Russell 2,000 index of small-cap stocks eked out a 0.04-point rise, to 427.83; the Wilshire 5,000 index slid 21.83, to 11,639.36; the American Stock Exchange composite index advanced 2.51, to 703.98; the New York Stock Exchange composite index fell 1.82 to 609.19; and the S&P; 400 midcap index skidded 3.29, to 391.84.
The Sun-Bloomberg Maryland index of the top 100 Maryland stocks lost 1.08, to 196.08.
Twenty stocks fell for every 11 that rose on the New York Stock Exchange, although stocks making 52-week highs outnumbered those falling to lows for the period 225 to 109.
Cisco rose $3.875, to $103.625, and Micron Technology Inc., one of the biggest makers of computer memory chips, gained $3.375, to $63.
Amazon.com climbed $20.875, to $158.875, and Yahoo increased $29, to $320. E Trade Group Inc., the No. 2 online brokerage, soared $9.75, to $64.0625.
Amazon.com has jumped more than $40 a share since it split 3-for-1 on Monday.
Morgan Stanley, the biggest U.S. securities firm by equity capital, gained $3.50, to $84.1875, adding to its 14 percent rise in the first three trading days of 1999. Morgan Stanley earned $1.49 a share, above the 96-cent forecast.
Lehman Brothers, up 22 percent so far this month, rose 25 cents, to $53.875. The fourth-largest U.S. securities firm earned 51 cents a share, above the 21-cent forecast.
Tenet Healthcare Corp. fell $3.50, to $23.50, the biggest drop in the S&P; 500, after the second-biggest U.S. hospital chain said its fiscal second-quarter profit fell 1.6 percent. Tenet is wrestling with bad debt and a money-losing acquisition.
Borders, the No. 2 U.S. bookseller, fell $5.0625, to $20, after warning that earnings for the year that ended last Friday will be as much as 7 percent short of estimates.
J. C. Penney fell $3.3125, to $43, after the second-biggest U.S. department store company said it won't meet analyst expectations. J. C. Penney said it's being hurt because it had to mark down prices and had lower-than-expected sales. The company said it will earn between 70 cents and 80 cents a share for the quarter, below the average estimate of $1.06 a share.
Avnet Inc., a distributor of computer parts, tumbled $10.9375, to $49, after warning that fiscal second-quarter earnings would be about 75 cents a share, below the 91 cents a share expected by analysts surveyed by First Call.
AirTouch jumped $2.125, to $82.1875, on word of MCI WorldCom's interest in a merger. Vodafone offered to buy AirTouch for about $55 billion, or $91 a share. Bell Atlantic bid about $43 billion, people familiar with the plans said.
Vodafone fell $4.50, to $176.25. Bell Atlantic rose 12.5 cents, to $56.
General Nutrition Cos. rose $4.375, to $19.75. The top U.S. retailer of vitamins and health products said it will locate stores inside 1,500 Rite Aid Corp. drugstores in the next three years, and the two companies will jointly sell a new line of vitamins.
Pub Date: 1/08/99