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U.S. stocks lose more ground
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December 14, 1998: 1:50 p.m. ET
Impeachment worries and Japan's economy keep investors preoccupied
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NEW YORK (CNNfn) - Blue chips and big-name technology issues suffered broad losses in early afternoon trading Monday as Wall Street couldn't seem to shake worries about an impeachment vote of President Clinton and concerns about the economic outlook in Japan.
Around 1:30 p.m. ET, the Dow Jones industrial average was down 82.39 points at 8,739.37. Declines trounced advances 2,175 to 809 on trading volume of 421 million shares.
The Nasdaq Composite dropped 43.74, or about 2 percent, to 1,985.57, while the S&P 500 benchmark index fell 19.64 to 1,146.82.
Bonds powered ahead as stocks floundered, helped by weakness in overseas markets and signs of lower Japanese business confidence in the widely-followed tankan survey.
The benchmark 30-year Treasury bond was up 23/32 of a point in price for a yield of 4.97 percent.
The dollar was mixed against the German mark and the Japanese yen, helped by the tankan but hurt by investors' fears over the Thursday impeachment vote against President Clinton. The dollar fetched 1.64 marks and 115.32 yen.
"Uncertainty in Washington has greased the slide downward," said Al Goldman, chief market strategist at A.G. Edwards in St. Louis, Mo. But, U.S. stocks were due for a correction after a remarkable run-up that saw the Dow rise 24 percent in six weeks, he said.
The losses Monday may set the stage for an end-of -year rally later this week, Goldman said.
Mergers and cutbacks
Leading the way on Wall Street, shares of United States Satellite Broadcasting Co. (USSB) were up 25.97 percent after General Motors subsidiary Hughes Electronics announced plans to buy it in a deal worth $1.3 billion. The stock rose 2-1/2 to 12-1/8.
Likewise, shares of New England Electric System (NES) bucked the trend and rose after a U.K. utilities group is buying the company for $3.2 billion in cash, a 25 percent premium from the stock's Friday close. The stock was up 4-3/4, or 11.05 percent, at 47-3/4.
Online bookseller Amazon.com (AMZN) erased earlier losses and was up 6-1/16 at 229-1/16 after the company was added to the Nasdaq 100 index on Monday.
But other parts of the market weren't so lucky.
In the technology sector, investors had a mixed reaction to news that Oracle (ORCL) and Sun Microsystems (SUNW) are licensing major parts of each other's software in a direct assault on Microsoft (MSFT). Oracle was up 1/2 at 37-3/4, but Sun Microsystem couldn't hold onto earlier gains and fell 5/8 at 76-3/4.
Microsoft, meanwhile, fell after reporting it was buying a $200 million stake in Qwest Communications International (QWST) to tap into the company's high-speed Web network. Shares of Microsoft were down 3-15/16 at 130-1/16, and Qwest lost 1-9/16 to 41-13/16.
Citigroup (C) lost ground on news of a $1 billion restructuring charge to pave the way for its merger with Travelers Group. The stock was down 1-3/8 at 46-3/8.
And toymaker giant Mattel (MAT) failed to inspire investors after announcing a $3.8 billion purchase of the Learning Co., a producer of educational and entertainment software. Mattel also warned that fiscal 1999 earnings would be $1.50 a share -- 59 cents lower than expected. The stock was down 7-3/16, or 23.86 percent, at 22-15/16.
Cisco Systems (CSCO) was down 2-7/16 at 81-1/16, while shares of Dell Computer (DELL) dropped 2-1/16 to 65-1/8 and Intel (INTC) shed 4-1/16 to 112-3/8. Dow member IBM (IBM) lost 3-3/8 to 164-5/8, and banking giant J.P. Morgan (JPM) slumped 2-3/8 to 98-1/8. Internet search engine Yahoo (YHOO) was down 1-5/8 at 194-1/16.
-- by staff writer Martine Costello
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