Share this article

print logo

STOCKS LOWER BUT UP FROM DAY'S BOTTOM

The Dow Jones industrials slid 269 points on Friday before erasing two-thirds of its losses by the end of the second-busiest trading session ever.

The drop was tied to escalating economic troubles in Asia and continued worries about how they will affect domestic corporate earnings.

But many saw the drop as exaggerated, and a steady stream of buying in the afternoon saved the Dow from its worst drop since the 554-point loss on Oct. 27.

"This is not Armageddon," said James Tillar, an equity strategist with Dean Investment Associates, which oversees $4 billion. "The market tends to overact on the upside and the downside."

Dow stocks General Electric and Chevron both announced plans to buy billions of dollars worth of their own stock, giving the market some encouragement.

The Dow average ended down 90.21 at 7,756.29, extending Thursday's 110-point decline and ending lower for the third consecutive session.

AT&T Corp. rose 2- 3/1 6 to 61- 5/1 6, helping the Dow pare its losses. AT&T agreed to sell its Universal Card unit to Citicorp yesterday for $3.5 billion, a move that will cut 57 percent from its debt.

Microsoft Corp. fell 2- 3/1 6 to 128-1 1/1 6 after the Wall Street Journal reported that the U.S. Justice Department's hiring of David Boies, an antitrust litigator, could lead to a broadening of the government's antitrust case against Microsoft.

Volume on the New York Stock Exchange was the second-highest in history, with 793.20 million shares changing hands, the highest level since it topped 1 billion shares on Oct. 28. Advancers trailed decliners by almost 2 to 1 on the Big Board.

See Markets Page C14
Markets: Bond yields flirt with 4-year lows
Continued from Page C11
"The question is, will the problems in Southeast Asia impact the U.S. in 1998," said Hildegard Zagorski, an analyst at Prudential Securities. "Lots of economists say they will slow down growth and affect earnings. You've got a very cautious market here."

The market fell to its low of the day about 90 minutes after the opening on Wall Street after another major corporate bankruptcy in Japan precipitated a 5-percent drop in the Nikkei index that spread to Europe before reaching the United States.

The rout in Japan resulted from a bankruptcy filing by Toshoku Ltd., a major Japanese food trading company, which cited tighter lending policies among Japan's troubled banks.

Including gains on Monday and Tuesday, the Dow finished the week down 82 points and it remains about 500 points below its all-time closing high of 8,259.31 reached Aug. 6. But it is still up 20 percent for the year.

Investors are concerned, however, that the strong gains on Wall Street over the last three years may be halted by the economic difficulties in Asia, which could diminish U.S. exports to Asia and hurt domestic corporate profits.

The Nasdaq composite rose 1.55 to 1,524.74.

Other broad indexes were lower, however, the NYSE composite lost 4.30 to 497.39, the American Stock Exchange's market value index fell 4.19 to 660.68, while the Standard & Poor's Corp.'s 500 index shed 8.52 to 946.78.

Bond prices rallied in volatile trading Friday, with yields flirting with new four-year lows, as investors sought the safety of U.S. government securities amid global stock-market turmoil.

The price of the benchmark 30-year Treasury bond ended the day with a gain of 5-32 point, or $1.56 per $1,000 in face value. Its yield, which moves in the opposite direction, fell to 5.92 percent, matching the four-year low set a week earlier, from 5.93 percent late Thursday.

There are no comments - be the first to comment