Stocks Follow Bond Market Lower

Stocks rebounded late Wednesday, recovering from sharp losses to close slightly lower, mimicking action in the bond market.

The Dow Jones industrial average ended down 3.25 at 4,762.35. At one point early Wednesday afternoon, when losses reached 51 points, the New York Stock Exchange halted computer-driven program trading.

Technology stocks took the brunt of the selling.

Larry Wachtel, a market analyst at Prudential Securities, said investors were selling to take profits in stocks that have performed well this year, but did not necessarily redeploy those profits with new investments in the stock market.

“When you come out of your Microns, it’s hard to find alternatives,” he said. “You go into cash and wait for them to complete the decline.”

The market’s action was the mirror image of Tuesday’s activity, when the Dow average gave up a substantial lead to close down 4 points.

Declining issues led advancers by a 7-to-3 margin on the Big Board. Volume was heavy at 410.98 million shares as of 4 p.m., up from 362.55 million on Tuesday.

Some of the stocks that moved substantially Wednesday:

NYSE

AT&T rose 2-1/8 to 65-7/8.

The telephone giant may cut more than 20,000 jobs by late next year as part of its planned breakup into three companies, The Wall Street Journal reported.

Boeing fell 7/8 to 67-3/4.

Operators of Boeing 767 jetliners have been told by the Federal Aviation Administration to inspect the planes’ main landing gear for possible stress cracks.

NASDAQ

Egghead Inc. fell 1-3/8 to 7-7/8.

Jensen Securities downgraded the shares to “underperform” from “buy,” saying it doubts the Spokane software maker can turn around its Corporate Government & Education business. The company said late Tuesday that its expects a loss for the second quarter ending Sept. 30 of about 21 cents per share.

Cisco Systems fell 1-5/8 to 68.

The San Jose., Calif., company agreed to buy Fremont, Calif.-based Grand Junction Networks for 5 million of Cisco common shares.

AMEX

U.S. Alcohol rose 1/4 to 2-3/16.

The company agreed with dissident shareholders to abandon a consent solicitation campaign begun by the shareholders. It increased its board to seven and accepted three resignations from its existing board.