Profit-Taking Sparks Stock Sell-Off

Stocks ended Wednesday’s session mixed but mostly lower, as investors took profits amid uncertainty about the direction of the economy.

The Dow Jones industrial average ended 23.17 points lower at 4,462.03, after being down all day. On the Big Board, declining issues led advancers by about 3 to 2. Volume was moderately heavy at 327.73 million shares as of 4 p.m., down from 339.99 million in the previous session.

Traders and analysts attributed the market’s weakness to normal profittaking after huge runs to the upside.

“The market has moved up now close to 26 weeks without more than a 2.5 percent correction,” said Ricky Harrington, technical analyst at Interstate-Johnson Lane in Charlotte, N.C.

“We have to expect a correction at any time, and trying to call it is certainly a futile exercise.” A correction is a decline that follows a rally.

The stock market was also rattled by comments from Federal Reserve Chairman Alan Greenspan, who said the economy is slowing significantly.

Some of the stocks that moved substantially Wednesday:

NYSE

IBM fell 1 1/2 to 89 7/8.

The computer giant made a surprise hostile bid for Lotus Development Corp., a software concern, for $60 per share, or about $3 billion. Lotus has reportedly approached other companies to submit counterbids.

Micron Technologies rose 1 5/8 at 46 3/4.

This stock was among the investment professionals’ picks in The Wall Street Journal’s dart board contest.

Caterpillar rose 5/8 to 60 3/4.

The construction machinery maker increased its quarterly dividend by 40 percent to 35 cents a share from 25 cents.

NASDAQ

Lotus Development rose 9/16 to 62 3/8.

IBM made a surprise hostile bid for Lotus at $60 per share, or about $3 billion. Lotus reportedly approached other companies to submit counterbids.

Intel rose 3/4 to 113 1/8.

Microsoft rose 7/8 to 84.

Cisco Systems fell 1/4 to 44 1/2.

Computer stocks reversed earlier losses that were made on profittaking, as investors came back in as buyers in late morning.

AMEX

Pegasus Gold fell 7/8 to 10 5/8.

The company said three additional parties have sued the company, alleging that it violated the Clean Water Act, following a similar action by the Montana Department of Health and Environmental Sciences in 1993.