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Sell programs rock Dow
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December 4, 1996: 3:01 p.m. ET
Wall Street endures another wild session dominated by program selling
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NEW YORK (CNNfn) -- Another series of sell programs crippled stocks Wednesday, with blue-chips shares taking the hardest hit.
The Dow Jones industrial average, coming off its worst loss since July, was down another 71.55 points to 6,371.14 just before 3 p.m. ET. The index experienced deja vu as Tuesday's session was also hurt by sell programs, which caused a 79-point drop.
On the New York Stock Exchange, declines trounced advances, 1,479 to 879, as more than 367.6 million shares changed hands.
In the broader markets, the S&P 500 fell 9.28 points to 739.00, while the American Stock Exchange slipped 5.32 to 586.86, and the Nasdaq Composite declined 11.33 to 1289.04
The bond market also fell victim to the selling craze. The price of the Treasury's long bond dropped 15/32, hiking the yield to 6.41 percent.
The markets remained down despite a report from the Federal Reserve that showed the economy kept growing moderately during November with little or no sign of wage or price pressures.
The Fed's latest Beige Book summary of national economic activity appeared to suggest that slow but steady expansion, rather than an acceleration, lies ahead, so there would be little need for an increase in interest rates to dampen inflation risks.
Traders focused their attention on a possible merger in the airline industry. Delta Air Lines (DAL) edged up 1/2 to 75-1/2 after published reports said the carrier is negotiating to acquire Continental Airlines. An agreement would form the largest carrier in the United States with combined revenues topping $18 billion and service to hundreds of domestic and overseas locations. Both companies denied that they are in talks, but that was not enough to stop speculation. Shares in Continental (CAI.A) rose 1-3/4 to 30-1/4.
Rumors about Delta and Continental sparked interest in other major airlines, sending shares of UAL (UAL), the parent company of market leader United Airlines, up 2 to 59-3/4, while USAir (U) fell 1 to 25-3/8 and AMR (AMR), American Airlines' parent, added 1/2 to 91-1/2.
GT Interactive Software (GTIS) tumbled 5 to 7-5/8 after the company said late Tuesday it will not meet Wall Street's expectations for the quarter. Lehman Brothers and UBS Securities downgraded the stock on that news.
Union Carbide (UK) lost 1-3/8 to 44-1/4 after PaineWebber downgraded its stock.
Intel (INTC) rose 7/8 to 126-3/4 on Soundview Financial raised earnings estimates for the chipmaker and predicted the stock price could rise to 150 per share.
Shares in Schering-Plough (SGP) slipped 2-3/8 to 66-3/4 on word that the company filed a patent-infringement lawsuit against rival Amgen. The claim involves rights to market a drug that treats hepatitis. Amgen (AMGN) lost 5/8 to 61.
Research Medical (RMED) jumped 2-3/4 to 22-3/4 after the company agreed to be acquired by Baxter International for $236 million or 23-1/2 per share. Baxter (BAX) remained unchanged at 41.
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