NEW YORK -- U.S. stocks fell yesterday, with Eli Lilly & Co. leading the drop after an analyst warned that sales of its top drug, Prozac, will be disappointing.
The Dow Jones industrial average made some headway in the first hour of trading, rising to within 40 points of 10,000, but bond losses steepened and stocks followed, sending the index lower.
On the day, the Dow fell 51.06, to 9,879.41, led lower by technology issues, including IBM Corp., and financial stocks, which declined in response to higher interest rates. IBM closed down $2.9375, at $178.0625. Citigroup Inc. fell $1.75, to $62.75.
The Standard & Poor's 500 index fell 8.56, to 1,297.82, and the Nasdaq composite index declined 10.30, to 2,428.97.
Elsewhere on the broad market, the Russell 2,000 index, a benchmark of small-cap stocks, fell 0.74, to 398.43; the Wilshire 5,000 index dropped 65.50, to 11,792.64; and the American Stock Exchange composite index slid 0.48, to 715.83. The S&P; 400 midcap index added 0.48, to 367.22.
The Sun-Bloomberg Maryland index of the top 100 Maryland stocks lost 1.13, to 182.58.
Sixteen stocks fell for every 13 that rose on the New York Stock Exchange, where trading volume was 752.3 million shares.
The 30-year Treasury bond was down $3.20 per $1,000 in face value late in the day, pushing its yield to just under 5.5 percent from 5.47 percent late Tuesday.
Lilly fell $5.3125, to $88.75, after Stephen Scala, an analyst at SG Cowen & Co., said this year's sales of Prozac could total $2.93 billion, below the firm's $3.05 billion forecast, and termed its per-share earnings estimate of $2.32 "a couple of pennies too high."
Merck & Co. dropped $1.875, to $84, and Pfizer Inc. declined $1.75, to $140.25. Baxter International Inc., a maker of health care products, fell $4.4375, to $69.50.
Caterpillar rose $3.25, to $47.25, and other heavy-machinery stocks gained, on expectations that rising prices for equipment and an increase in orders will help profit at the largest maker of construction equipment.
Deere gained $3.875, to $36.50; Case rose $2.4375, to $24; New Holland climbed 37.5 cents, to $9.4375; and AGCO Corp. rose 50 cents, to $6.5625.
U.S. Filter Corp. advanced $5, to $30, amid speculation that the world's leading water and wastewater treatment company might be bought by General Electric Co.
Saks Inc. fell $1.50, to $27.4375. The owner of Saks Fifth Avenue warned after the market closed yesterday that this year's profit may be less than expected.
America Online Inc. rose $3.5625, to $108.50, after the world's largest online service said it completed its $9.8 billion acquisition of Internet software maker Netscape Communications Corp. AOL's market capitalization rose above $100 billion for the first time.
Charles Schwab Corp. fell $2.0625, to $86.4375, after customers were unable to log on to the biggest online broker's Web trading system for 15 minutes early yesterday, and E*Trade Group Inc. shares lost $1.375, to $55.50, after experiencing similar problems.
AT&T; rose $1.4375, to $83.875, after the largest U.S. phone company declared a 3-for-2 stock split, payable April 15 to shareholders of record March 31.
Oil stocks gained as crude oil rose as much as 2.8 percent, close to a four-month high. Mobil Corp. rose $1.75, to $93.125; Texaco Inc. added $1.75, to $55.625; Schlumberger Ltd. gained $3.875, to $59.75; and Halliburton Co. advanced $2.1875, to $37.0625.
RealNetworks Inc. jumped $6, to $121. Microsoft Corp. is introducing a new version of its Web-browsing software today, including a renewed collaboration with rival RealNetworks, the Wall Street Journal Europe reported. The agreement will let Internet Explorer users connect to Real- Networks' newly enhanced directory of sites offering audio and video clips, dubbed RealGuide.
Novell Inc. gained $1.9375, to $26, after analyst Joseph Bellace at Merrill Lynch & Co. raised his rating to "long-term buy" from "long-term accumulate," Bellace expects Novell to demonstrate new software which will help companies use electronic commerce on their networks. He also expects the No. 2 maker of networking software to announce an alliance with Compaq Computer Corp. and another company at a conference next week.
United Technologies Corp. rose 62.5 cents, to $130.25, after Lear Corp., the world's largest maker of car seats and interiors, agreed to buy United Technologies' auto-parts unit for $2.3 billion, beating a rival bid from investment firm Blackstone Group. Lear fell 37.5 cents, to $36.
Minnesota Mining & Manufacturing Co. fell $2.1875, to $76.375. The maker of consumer and industrial products, which gets more than half of its sales abroad, said earnings would fall by 3 cents if the dollar holds gains achieved so far in the quarter.
Coltec Industries Inc. rose $1.1875, to $19.50, after B. F. Goodrich Co., received Defense Department approval for its proposed $1.88 billion purchase of Coltec.
Pub Date: 3/18/99