Stalled Budget Talks Spark Sell-Off; Dow Skids

Blue-chip stocks dove late Wednesday as budget talks in Washington fell apart for the second time. The broader market ended mixed.

The Dow Jones industrial average tumbled 50.57 points to close at 5,059.32, after spending most of the day slightly higher. Traders and analysts said a powerful wave of computer-driven sell programs in the last 15 minutes of trading pushed the Dow down more than 30 points.

Despite the drop in the Dow industrials, advancing issues led decliners by about 3 to 2 on the New York Stock Exchange. Big-Board volume was heavy at 437.68 million shares as of 4 p.m., but well below Tuesday’s 478.27 million shares.

Stock investors started the day extending Tuesday’s rise following a brutal 101-point drop in the Dow average on Monday.

But “when the bond market began to stall, that’s what turned around the bias of the market,” said Eugene Peroni, director of technical research, and technical selling near the close “brought the house down.”

Some of the stocks that moved substantially Wednesday:

NYSE

IBM fell 2-1/2 to 89-3/8.

Hewlett-Packard fell 3/4 to 83-1/8.

IBM dissolved its Taligent software partnership with Apple and Hewlett-Packard. IBM will now control the project, with the other two companies retaining licensing rights. Hewlett-Packard’s shares jumped 6-5/8 Tuesday after Salomon Brothers upgraded it, citing strong fundamentals.

Boeing rose 2-5/8 to 78.

The Seattle-based aircraft and defense manufacturer said it will boost jetliner production in the first quarter of next year for the first time in about half a decade, to fill more orders and catch up with the backlog from a 10-week strike.

McDonnell Douglas fell 3/8 to 88-3/8.

General Dynamics rose 1 to 61.

A federal judge abruptly ruled against the government in a case that could require the Pentagon to pay General Dynamics and McDonnell Douglas as much as $1 billion each in a dispute over the Navy’s A-12 jet.

NASDAQ

AHI Healthcare Systems Inc. fell 7-3/8 to 6-1/8.

The company late Tuesday warned of a largerthan-expected loss in 1995, blaming costs tied to developing new networks outside Southern California, plus delays in its pending acquisition of Lakewood Health Plan of Lakewood, Calif.

AMEX

Greyhound Lines Inc. rose 3/8 to 4-3/8.

Once on the brink of financial collapse, the long-distance bus company seems to be staging a dramatic turnaround, Dow Jones News Services reports.