Stock Prices Plunge In Late Technical Selling

A strong wave of technical selling hammered stocks in late trading on Friday, moving the Dow Jones industrials farther away from 4,000 after its flirtation with that uncharted territory.

The Dow closed at 3,953.54, down 33.98 for the day.

The blue chip index was moderately lower for nearly the entire session. Then sell orders tied to a double futures expiration flooded the market in the last 20 minutes of trading, creating many trading imbalances and sending the Dow down about 25 points.

The drop was a setback for investors who had hoped the Dow could pierce 4,000. The index had crept tantalizingly close to that level, setting two consecutive all-time highs this week to close Thursday’s session at a record 3,987.52.

Decliners had a 4-to-3 lead on advancers on the New York Stock Exchange. Big Board volume was heavy at 347.92 million shares as of 4 p.m., but below Thursday’s very heavy 360.99 million shares.

The Standard & Poor’s 500 composite, which reached three new highs this week, receded today as well, falling 3.25 to 481.97. The S & P’s high of 485.22 was set on Thursday.

Stocks weakened early in the day in sympathy with the bonds and the dollar, even after the Commerce Department pegged the nation’s December trade deficit at $7.34 billion, narrower than analysts had expected.

But Commerce also said the deficit soared by 25.4 percent last year to $166.29 billion.

Some of the stocks that moved substantially or traded heavily Friday on the New York Stock Exchange, Nasdaq Stock Market, and American Stock Exchange.

NYSE

Motorola fell 6 3/8 to 57 7/8.

The semiconductor and communications equipment maker warned of high cellular telephone inventories and weak sales of its integrated radio system. Donaldson, Lufkin & Jenrette Securities downgraded the stock after the announcement.

Compaq fell 1 1/4 to 36 5/8.

IBM fell 1/2 to 75.

Digital Equipment fell 3/4 to 35 3/8.

Computer stocks were lower in sympathy with Motorola.

Hewlett-Packard fell 1 1/2 to 114 3/8.

The computer maker’s stock fell in sympathy with other computer makers, even after a strong gain on Thursday following a report of higherthan-expected first-quarter earnings and a 2-for-1 stock split. CS First Boston upgraded the issue and raised its 1995 earnings estimate.

Merck rose 7/8 to 41 3/8.

Philip Morris fell 1 5/8 to 60 1/8.

A federal judge allowed a class action lawsuit against tobacco companies to go forward.

NASDAQ

Intel fell 1 1-16 to 78 13-16.

Semiconductor stocks fell after Motorola said it experiencing manufacturing inefficiencies in its chip sector.

AMEX

Echo Bay rose 1/8 to 9.

The gold miner’s 1994 income was 7 cents per share, up from 3 cents a year ago. However, the company posted a fourth-quarter loss of 5 cents per share, compared with a gain of 2 cents in the year-ago quarter.