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Kodak's negative hits Dow
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March 21, 1997: 12:00 p.m. ET
Triple witching causes volatile day for stocks; broader market higher
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NEW YORK (CNNfn) - A sharp drop in Eastman Kodak shares cut into the Dow Jones industrial average at midday Friday, as traders added a little witch's brew to an already volatile mix of stock market activity.
The blue-chip average was down 18.13 points to 6,802.15 at noon. It had opened up nearly 30 points, but fell sharply after component Eastman Kodak (EK) said its sales in January and February were disappointing. Shares in the company tumbled 10 to 78-1/4, contributing 30 points to the Dow's loss.
On the broader market, New York Stock Exchange advances led declines, 1,200 to 948, with more than 281.6 million shares changing hands. Among the key broader and secondary market indexes, the S&P 500 climbed 3.42 to 786.07 the Nasdaq Composite rose 3.57 to 1,262.83 and the American Stock Exchange index dipped 0.47 to 591.08.
Traders and analysts said stocks could be in for a wild ride. The reason: options on stocks, indexes and futures are all expiring on the same day. This so-called "triple witching" forces players to decide whether to exercise their positions. The event coincides with anxieties over the Federal Reserve's policy meeting next week.
Tobacco shares, which plunged Thursday on Liggett Group's decision to settle lawsuits with 22 states, continued to lose ground. Philip Morris (MO) fell 3-3/4 to 112-1/8 on top of Thursday's 6-1/8 loss, while RJR (RN) slipped 3/8 to 31-1/8. Liggett's parent Brooke Group (BGL) gained 1/8 to 5.
Drug wholesaler Bergen Brunswig's decision to cancel its $1.65 billion merger with Ivax sent Bergen (BBC) shares up 1-1/8 to 33-5/8. The company did not initially offer a reason for the decision, but analysts noted that the agreement came under heavy scrutiny. Ivax (IVX) fell 1-5/8 to 10-3/4.
Shares in Novell (NOVL) edged up 1/16 to 10-5/16 on word that the company will team up with Netscape Communications to form a software company that challenges Microsoft. Netscape (NSCP) climbed 3/4 to 31-3/4, while Microsoft (MSFT) added 7/16 to 97-7/16.
3COM (COMS) rose 5/8 to 34-1/4 after beating Wall Street's estimates with an 18 percent increase in quarterly profits. The company had warned that it would miss estimates.
And Nike (NKE) gained 3/8 to 67-7/8 in the first trading session after the company said its earnings rose 77 percent last quarter.
--David Rynecki
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