Investors Rattled By Ibm’s Bearish Outlook

IBM’s cautious outlook on the coming months undercut the Dow Jones industrial average and the broader market Wednesday as investors took profits on a three-day winning streak.

The Dow industrials tumbled 70.09 points to 5,549.93, but IBM accounted for nearly half of that.

Most of the other broad-market measures were negative too, but not as sharply. And the American Stock Exchange’s market value index managed another positive session, climbing 1.07 to 580.38 for its second straight record close.

IBM started the day higher after releasing a strong earnings report that beat Wall Street forecasts.

But in a subsequent conference call with analysts, IBM’s top financial executive warned that currency fluctuations and a continuing shift in big computer design and demand could pose difficulties in the near future. IBM stock tumbled after the call, ending the day at 105-1/4, down 10-1/4.

Declining issues outnumbered advancers by more than 4 to 3 on the New York Stock Exchange, where volume was heavy at 452.89 million shares, almost even with Tuesday’s pace.

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

NYSE

Ford Motor, up 1-1/4 to 36-5/8.

Chrysler, up 1 to 63-1/2.

The nation’s No. 2 automaker said its profits dropped 58 percent in the first quarter on slower sales and high costs of introducing redesigned models. But the profit of $653 million, or 54 cents a share, exceeded analyst forecasts.

Coca-Cola, down 1-1/4 to 80-1/8.

The company said its profits rose 12 percent to $713 million, or 57 cents a share, in the first quarter as stronger sales in the United States offset weakness in Latin America. But the earnings were slightly below analyst expectations.

AT&T, down 1/2 to 61-3/8.

The telecommunications company said its earnings improved 17 percent in the first quarter to $1.44 billion, or 90 cents a share, but the profit was slightly shy of some estimates.

NASDAQ

Linear Technology, down 7-3/4 to 31-1/2.

The chip maker reported strong third-quarter earnings late Tuesday, but issued a bearish outlook.

AMEX

Emerson Radio, up 3/16 to 2-9/16.

The stock rose after the maker of appliance and security equipment announced its bid to acquire International Jensen.