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Wall Street under pressure
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January 7, 1999: 1:44 p.m. ET
Stocks succumb to selling as investors take their profits after powerful rally
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NEW YORK (CNNfn) - Sellers once again took the upper hand on Wall Street in afternoon trading Thursday, driving the market lower a day after a broad-based rally pushed all major market indicators to record high ground.
Concerns that the market may have run up too fast, a slight drop in the equity allocation in the model portfolio of Goldman Sachs' Abby Joseph Cohen, as well as shaky performances in markets overseas and a severe sell-off in Brazil, all put their weight on stocks.
Shortly before 1:30 p.m. ET the Dow Jones industrial average was 84.45 points lower at 9,460.52. Trading volume on the New York Stock Exchange reached 524 million shares, with declines leading advances 1,983 to 945.
The Nasdaq Composite moved lower again, shedding 7.79 to 2,313.07 and the S&P 500 index dropped 10.00 to 1,262.34. (Click here for a look at today's CNNfn market movers)
Financial, and especially brokerage, stocks showed strength, as did many Internet shares, while most technology issues retreated after several days of strong advances. Airline shares also sailed higher, lifting the Dow transports index 2.60 points to 3,320.06.
The bond market traded lower, hurt again by renewed declines in the dollar against the yen. The benchmark 30-year Treasury bond was down 29/32 point in price for a yield of 5.22 percent.
The dollar resumed its slide against the yen overnight and remained lower in U.S. trading. The U.S. currency also traded lower against the euro.
Merger saga continued
In stocks, the ongoing competition for the buyout of AirTouch Communications (ATI) entered a new phase following a USA Today report that MCI WorldCom (WCOM) may also enter the bidding war. That would put MCI WorldCom in competition with Bell Atlantic (BEL) and British group Vodafone (VOD), which have already offered to pay $45 billion and $55 billion for AirTouch respectively.
Shares of AirTouch bucked the overall market trend, rising 2-1/2 to 82-3/8. But the stocks of most of its bidders fared worse. MCI WorldCom lost 4-1/16 to 74-5/16, Bell Atlantic was up 1/8 to 56 and American depositary receipts of Vodafone dropped 3-3/4 to 177.
Financials shine
Financial stocks were also among the day's focus sectors following better-than-expected earnings reports from two of Wall Street's premier outposts. Shares of Lehman Brothers (LEH) climbed 7/8 to 54-1/2 after the brokerage said it earned 51 cents per diluted share in the fourth quarter, well above consensus expectations for 21 cents a share.
Fellow financial firm Morgan Stanley Dean Witter (MWD) saw its shares gain 3-1/8 to 83-13/16 after posting earnings of $1.49 a share in the fourth-quarter, compared to $1.30 a share a year earlier and well above market expectations for 96 cents a share.
Elsewhere in the financial world, shares of Merrill Lynch (MER) rose 7/16 to 77-5/16 and Dow component Citigroup (C) was up 1-5/16 to 55-11/16.
Technology stocks lost a little of their luster as investors pocketed some gains from the sector's recent run-up. Shares of Dow component IBM (IBM) was unchanged at 188-3/4. Dell Computer (DELL) fell 3/16 to 77-15/16, Microsoft (MSFT) declined 2-1/16 to 149-3/16 and Intel (INTC) eased 7/16 to 129-1/16.
Cisco Systems (CSCO) defied gravity, rising 2-9/16 to 102-5/16. Cicso announced it had teamed up with General Instrument (GIC) to develop a system for AT&T (T) that would allow consumers to surf the Internet, send faxes, watch television and talk on the phone at the same time.
Finally, among the day's biggest losers, shares of Borders Group (BGP) tumbled 5-7/16, or nearly 22 percent, to 19-5/8 the company after late Wednesday warned that its fourth-quarter earnings would not live up to expectations. Goldman Sachs, J.P. Morgan and Brown Brothers Harriman downgraded the stock. 
-- by staff writer Malina Poshtova Zang
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