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Hearty Dow eases back
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November 24, 1998: 5:49 p.m. ET
Blue-chip index retreats from record, despite mergers and airline stock gains
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NEW YORK (CNNfn) - Blue-chip stocks ended lower Tuesday, as a six-week feast on Wall Street left market bulls patting their bellies to digest record gains from a day earlier.
The Dow Jones industrial average fell 73.12 points to 9,301.15. On the New York Stock Exchange, 1,659 issues declined and 1,416 advanced, with 770 million shares changing hands.
The Dow had capped a staggering 22.8 percent upward run since Oct. 1 on Monday, ending at a record 9,374.27.
The Nasdaq dropped 11.54 to 1,965.88, while the S&P 500 index fell 5.22 to 1,182.99.
Among market sectors pulling back Tuesday were Internet stocks, while banking and brokerage issues were mixed and airline stocks climbed.
Louis Holland, chief investment officer at Holland Capital Management in Chicago, said central bank easing of monetary policy has been the main driver behind the recent rally in stocks - not an improvement in U.S. corporate earnings. (206K WAV) or (206K AIFF).
Bonds plodded their way higher, as stock woes added luster to the lure of fixed-return securities. Treasurys shrugged off two economic reports showing solid consumer confidence and hearty U.S. economic growth.
The dollar was virtually unchanged against both the German mark and the Japanese yen.
Day two of a merger revival
Merger activity continued to power stocks Tuesday, a day after a staggering $40 billion in deals were announced.
Several bellwethers of the Internet world came through on a rumored deal. Online titan America Online (AOL) rose 2-5/8 to 91-7/8 after agreeing to buy Internet portal and one-time browser king Netscape Communications (NSCP) for $4.2 billion. Netscape rose 2-1/16 to 39-7/8.
Separately, AOL struck a partnership with Sun Microsystems (SUNW), the maker of the Java programming language, to develop new e-commerce and Internet devices. Sun gained 1-5/8 to 72-15/16.
In the day's biggest-ticket deal, Dow component International Paper (IP) agreed to buy fellow paper maker Union Camp (UCC) for $6.6 billion in stock. IP shed 1-13/16 to 44 as Union Camp soared 16, or nearly 33 percent, to 64-15/16.
Tying the knot in the retail sector were J.C. Penney (JCP) and drugstore chain Genovese (GDX.A) in a $492 million deal. JCPenney lost 2-7/16 to 52-1/2 and Genovese ended down 5/8 to 29-3/8.
Transportation issues were a bright sector, led by airlines that got a lift despite a negative outlook from a brokerage. AMR (AMR), the parent of American Airlines parent gained 3-3/16 to 68, Delta Air Lines (DAL) rose 2-7/8 to 55-3/4, and United Airlines' parent UAL (UAL) climbed 1-13/16 to 65-5/16.
Those airlines were behind a gain of 64.87, more than 2.1 percent, to 3078.72 in the Dow transport index. 
-- by staff writer Jamey Keaten
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