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Stocks hit highs and lows
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March 12, 1998: 5:16 p.m. ET
A mixed ending for stocks as Dow retreats, S&P hits new record high
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NEW YORK (CNNfn) - Blue chips had the blues Thursday, taking a day to catch their breath after two straight record sessions. But other markets still had energy left in them, leading the S&P 500 and the Russell 2000 indexes up slightly to new all-time highs.
Talk of a possible deal between the Nasdaq and the American Stock Exchange, which could dramatically change the trading landscape and create stiffer competition for the New York Exchange, also occupied investors' minds.
"I think that merging the resources of the two is certainly going to give the others a run for the money," said Maria Ramirez, president and chief executive of the Wall Street consulting firm bearing her name.
The Dow Jones industrial average fell 16.19 points to close at 8,659.56. On the New York Stock Exchange declining stocks barely led advancers 1,479 to 1,432 on trading volume of 599 million shares.
In broader markets, the technology-laced Nasdaq Composite rose 7.21 to 1,764.06 and the S&P 500 index finished up 1.46 to 1,069.93, a third record in as many days. The Russell 2000 index of smaller stocks also edged up 0.66 to 467.78, its second all-time high in a row. (Look here for the performance of widely held stocks.)
Despite the market's limited movements in either direction, Chris Grisanti, director of research at Spears, Benzak, Salomon & Farrell, said stocks are becoming dangerously overvalued and a sharp correction may not be too far. (311K WAV) or (311K AIFF)
Bonds rallied, helped by a strong dollar and as investors ignored robust economic data. The price of the benchmark 30-year Treasury bond rose a full point in price, lowering the yield to 5.86 percent.
The dollar settled in a range as investors cashed in on an overnight rally against the Japanese yen amid an escalating bribery scandal in Tokyo. The greenback finished virtually unchanged against the yen and the German mark.
Dow hits a bump
Declines in several members of the Dow industrials pulled the blue-chip index lower. The losers were led by shares of General Motors (GM), which fell 1-3/16 to 71-15/16 after Goldman Sachs dropped the stock from its recommended list and lowered its rating of GM to "market outperform." Goldman Sachs also lowered its GM earnings-per-share projection for 1998 to $8.50 from $8.70.
Another Dow component taking it on the chin was Merck (MRK), losing 11/16 to 129-1/16 after the Wall Street Journal reported that Security and Exchange Commission officials are charging a former Medco official and eight others with inside trading ahead of Merck's $6 billion offer for Medco.
Shares of fruit and vegetable powerhouse Dole Food (DOL) joined on the way down, losing 6-7/8, or more than 12 percent, to 50-1/4 after issuing a profit warning, saying cheap bananas could take first-quarter profit as much as 50 percent below results from a year earlier. Following the announcement, Deutsche Morgan Grenfell lowered its earnings estimate for Dole and Goldman Sachs cut its ratings on the stock.
Microsoft gets its way
Technology shares, which have caused several slides and rallies on Wall Street in the past week or so, once again attracted a hefty dose of investor attention after a Wall Street Journal report claimed the Justice Department may allow Microsoft (MSFT) to offer a version of its Windows 98 operating system that includes bundled browsing software. Shares of Microsoft climbed 1-3/16 to 81-7/8 on the news.
Other technology stocks were mixed, with IBM (IBM) rising 1-1/8 to 100-1/4, Intel (INTC) up 1/2 to 76-3/8, and Dell (DELL) down 1 to 63.
Not all news was bad for Wall Street Thursday. Stock of Pepsico (PEP) rose 2-3/4 to 43 after Merrill Lynch raised its rating of the company to "near-term buy" from "neutral."
Meanwhile, Amgen (AMGN) was the most actively traded stock on the Nasdaq, surging 3-3/8 to 58-3/8 after Salomon Smith Barney said the U.S. government had eased guidelines on Amgen's drug Epogen, which is widely used by patients on kidney dialysis.
Shares of several retailers also were active after a series of earnings reports and other news capped the February retail sales report. Sunglass Hut (RAYS) rose 13/16 to 10-9/16 after the company announced a sharp increase in losses for the fiscal year that ended Jan. 31, but said it would shut down 250 unprofitable outlets and discontinue its prescription glasses chain EyeX.
-- by staff writer Malina Poshtova Zang
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