Technology shares lead market's retreat; Disappointing sales at Dell, H-P contribute to slide; Dow drops 101


NEW YORK -- The Dow Jones industrial average dived into the close yesterday, matching big losses in the broader market that resulted from aggressive sales of technology shares.

The Dow fell 101.56 to 9,195.47, erasing a 68-point gain, and the Standard & Poor's 500 index stumbled 17.84, or 1.4 percent, to 1,224.03. Hewlett-Packard Co. accounted for one-fifth of the Dow's decline.

Dell Computer Corp. and Hewlett-Packard helped spark the drop by reporting weaker-than-expected sales Tuesday after the markets closed and prompting more concern that the industry's growth is slowing.

The Nasdaq composite index, full of computer and technology stocks, sank 64.96, or 2.8 percent, to 2,248.91. The index has lost 6.5 percent since Feb. 11.

Elsewhere on the broad market, the Russell 2,000 index, a benchmark of small-cap stocks, skidded 6.86, to 389.54; the Wilshire 5,000 index plunged 161.93, to 11,146.59; the American Stock Exchange composite index lost 7.19, to 688.65; and the S&P; 400 midcap index dropped 5.28, to 355.16.

The Sun-Bloomberg Maryland index slid 1.62, to 180.93.

Two stocks fell for every one that rose on the New York Stock Exchange, where 735.1 million shares changed hands, up from 653.76 million shares Tuesday.

Dell, the No. 1 direct seller of personal computers, declined $7.1875 to $81.5625, bringing its three-day loss to 20 percent. It was the third-busiest day for a stock in U.S. market history, with 112 million Dell shares, valued at $9 billion, changing hands. The shares dipped as low as $77.375 during the session.

Dell reported quarterly sales growth of 38 percent, the first time in two years it reported an increase of less than 50 percent. The No. 1 PC maker, Compaq Computer Corp., and other rivals are selling more machines directly to customers, imitating Dell's strategy.

Dell accounted for about one-eighth of the 884 million shares traded on the Nasdaq stock market yesterday. Its volume has been exceeded only by Oracle Corp., which traded 171.8 million shares on Dec. 9, 1997, and Comparator Systems Corp., which traded 152.1 million on May 6, 1996.

Hewlett-Packard fell $2.25 to $68.25. Like Dell, the world's second-biggest computer maker reported slower sales growth, and said it expects lackluster revenue growth for the rest of the year. The computer maker's earnings beat analysts' per-share expectations, but its 1 percent revenue growth did not.

International Business Machines Corp. fell $2.125 to $170.375.

Applied Materials Inc., which makes semiconductor fabrication equipment and parts, reported strong earnings late Tuesday, but fell 50 cents yesterday to $67.375.

Microsoft Corp. fell $6.25 to $150. Some customers who tested an early version of the Windows 2000 corporate software said they wouldn't upgrade to the operating system in its current form because it crashes often.

Great Lakes Chemical Corp. rose $4.625 to $40.25 and was the biggest gainer in the S&P; 500 after investor Warren Buffett said in a Securities and Exchange Commission filing that his Berkshire Hathaway Inc. bought a 6.8 percent stake in Great Lakes, the world's leading maker of chemicals used in flame retardants.

Texas Utilities Co. gained $1.25 to $43.1875. Peco Energy Co. advanced $1.3125 to $37.6875, and Duke Energy Corp. added 93.75 cents to $59.3125.

Fannie Mae added $1.8125 to $74, and Wells Fargo Co. rose $1.4375 to $36.50.

AmSouth Bancorp rose $3.8125 to $48.5625, its biggest jump since May 1981, after Standard & Poor's said it would add the regional bank holding company to the S&P; 500 index.

Medtronic Inc., the world's largest pacemaker company, fell $6 to $75 after saying that Arterial Vascular Engineering Inc., which it bought last month, had less revenue than expected in its fiscal third quarter.

Pub Date: 2/18/99

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