Plunging Dollar Weakens Stocks

Stocks weakened Thursday, hurt by a sharply lower dollar and renewed jitters about inflation.

The Dow Jones average of 30 industrial stocks fell 14.87 to 3,979.93, closing below 4,000 for the second time this week. The Dow was led lower by economically sensitive stocks, as investors sold issues they believed would lose value if interest rates rose.

Declining issues led advancers by about 6 to 5 on the New York Stock Exchange. Big Board volume totaled 329.43 million shares as of 4 p.m., down from 362.56 million on Wednesday.

The dollar slid to an all-time low against the Japanese yen and the lowest rate against the German mark since October 1992. The dollar was trading late in the day at 1.44 marks, down 2 pfennigs, and at 95.34 yen, down 1.54 yen.

The currency’s rout sent bond prices skidding, with the 30-year Treasury down about 1/2 point late in the session, pushing interest rates higher. Stocks fell along with bond prices.

Stocks bounced off the day’s bottom after the Treasury intervened to support the dollar, but still ended the day lower.

Some of the stocks that moved substantially or traded heavily Thursday:

NYSE

Wal-Mart Stores rose 1/2 to 24 7/8.

The Limited rose 1 1/4 to 18 3/4.

Sears rose 5/8 to 50 5/8.

Some retail stocks moved higher following the release of mixed and generally sluggish February sales figures.

Best Buy fell 1 5/8 to 21 1/4.

The computer retailer said February sales rose 10 percent in stores open at least a year, down from a 17 percent gain in January and a 15 percent advance in December.

Cineplex Odeon rose 3/8 to 2 1/4.

The company agreed to merge with Cinemark USA Inc. to create the world’s largest theatrical exhibition company with annual revenues of about $820 million.

NASDAQ

America Online rose 8 1/4 to 90 1/2.

The stock rose sharply for the second consecutive day after Bertelsman AG confirmed plans to buy a minority stake in the computer online network service. Also, America Onlin said its subscriptions are growing faster than expected, and analysts raised their earnings forecasts.

AMEX

Semtech rose 1 to 8 3/4.

The company said after the market closed that its fourth-quarter net earnings were 12 cents per primary share, up from 2 cents a year ago.