|
Philip Morris burns Dow
|
 |
August 9, 1996: 5:51 p.m. ET
Anti-tobacco verdict a blow to cigarette stocks; other markets unmoved
|
NEW YORK (CNNfn) - Philip Morris burned the Dow Jones industrial average Friday as the company's stocks plunged after the tobacco industry lost an important lawsuit.
A Florida jury awarded $750,000 to a man who said he started smoking in 1947 and couldn't kick the habit until he got cancer. The jury found Brown & Williamson Tobacco Co., the maker of Lucky Strikes cigarettes, negligent.
Philip Morris called the verdict, which could have ramifications in other suits against the tobacco industry, an aberration.
Not surprisingly, investors put a match to tobacco stocks Friday. Philip Morris (MO), dove 13-3/4 points to 91-3/4 in after-hours trading. The flames spread throughout the sector, with RJR Nabisco (RN) losing 4-1/4 to 28, B.A.T. Industries, parent of Brown & Williamson, falling 5/16 to 15-5/8, and US Tobacco (UST) tumbling 2-1/8 to 31-3/4.
With Philip Morris a Dow component, the blue-chip index closed down 32.18 points to 5,681.31. The bellwether measure had been hanging around the break-even mark most of the day and appeared set to end the week above the 5,700 level for the first time since early July. But the late sell-off crippled its chances. For the week, the measure gained 1.48 points.
The broader markets, however, were virtually unmoved despite a discouraging report on semiconductor sales in July.
On the New York Stock Exchange, advances led declines, 6-5, on light volume of 327.7 million shares. The S&P 500 slipped 0.49 points to 662.10 and the American Stock Exchange lost 0.97 points to 550.80.
The Nasdaq Composite fought off the effects of another poor book-to-bill report. The tech-laden measure dipped 0.24 points to 1,137.27. The Semiconductor Industry Association said late Thursday that orders for semiconductors fell for the second straight month in July. Technology stocks reacted negatively in after-hours trading Thursday, leading to speculation that the sector would crash Friday. But instead they held firm, carrying the index to a weekly gain of 12.35 points.
With the Treasury's debt auction over, bonds rallied this morning after the Labor Department reported that wholesale prices were unchanged in July, the latest sign that inflation is not threatening the economy. Many analysts had expected a 0.2 percent advance in the Producer Price Index last month.
In response, the yield of the benchmark long bond sank to 6.69 percent.
As expected, chipmaker stocks took the spotlight Friday. Intel (INTC), the largest semiconductor company, gained 1-5/8 to 82-3/8. Texas Instruments (TXN) was down 1 to 46-3/4 and Altera (ALTR) rose 3/4 to 47. Xilinx (XLNX) slipped 7/8 to 38-5/8.
Micron Technology (MU) fell 7/8 to 24-5/8. The company got a boost this week when Merrill Lynch predicted it would post strong earnings.
America Online (AMER) dropped 4-1/8 to 29-1/4. Earnings last quarter nearly quadrupled for the company, but AOL had to spend $8 million to settle class-action lawsuits over its billing practices.
On the IPO front, Hambrecht and Quist (HMQ) traded at 18-1/4 after being offered at 16. The investment banking firm postponed the offering it planned last week because of the unfriendly IPO environment.
National Processing (NAP) was offered at 16-1/2 and reached 19. The company is a leading processor of financial transactions.
And Bank United (BNKU) hit 22-7/8. The IPO was one of the more active issues on the Nasdaq Friday. Shares were offered by Merrill Lynch at 20.
Elsewhere, USA Detergents (USAD) soaked up 4 to 33 after J.P. Morgan upgraded the cleaning products company.
Quarterdeck (QDEK) gained 1 to 8-3/4 after a Business Week article said the company is a target of McAfee Associates, a leading designer of anti-virus and computer security software.
McAfee (MCAF) fell 1 to 61-1/8. 
|
|
|
|
|
 |
|
