Dow Plunges As Investors Bail Out

Investors finally blinked on Wednesday, dumping high-flying technology stocks of every description and sending the stock market into a brief free fall before closing above the day’s lows.

In addition to the flight from technology issues, the market retreat also was tied to a sharp drop in bond prices, which pushed interest rates markedly higher.

The Dow Jones industrial average closed at 4,628.87, down 57.41, but only after trimming a loss of more than 133 points earlier in the day.

Declining issues outstripped advancers on the New York Stock Exchange by more than 3 to 1. According to preliminary figures, volume was the third-highest on record at 482.87 million shares as of 4 p.m., up sharply from the 372.19 million shares logged on Tuesday.

Some market players had been predicting that the stock market was poised for a significant slide. But the suddenness and severity of Wednesday’s sell-off were a rude surprise to analysts and traders.

“This doesn’t almost take your breath away - it does take your breath away,” said Hugh Johnson of First Albany Corp.

Some of the stocks that moved substantially Wednesday:

NYSE

IBM fell 5-3/4 to 101-1/4.

Micron Technologies fell 3 to 57.

Compaq fell 2-3/8 to 45.

Technology stocks sank in a round of aggressive profit-taking, and on disappointing news from sector leaders Microsoft and Intel.

Ford Motor fell 7/8 to 30-1/8.

Chrysler fell 5/8 to 48-7/8.

General Motors fell 5/8 to 48-7/8.

Auto stocks fell after Ford and Chrysler announced second-quarter earnings. Ford said its secondquarter net profit came to $1.45 per share, compared with $1.63 a year ago. Chrysler’s net income plunged 86 percent in the second quarter after a one-time charge of $143 million.

NASDAQ

Microsoft fell 10-3/8 to 91-1/2.

The shares slid 7-1/8, or 6.5 percent, on Tuesday, after a company official made some sobering remarks about its new Windows 95 product and said he was “mystified” why the stock was so fully valued.

Intel fell 9-1/2 to 63-3/4.

The microchip maker late Tuesday released disappointing secondquarter profits of 99 cents a share, below analyst projections of $1.05.

Itron fell 1-3/8 to 23-1/2.

Stock of the Spokane-based company continued to lose ground a day after it projected lower earnings for the rest of the year.