Boeing Can’t Save Dow In Another Volatile Session

A big lift from Boeing failed to keep the Dow Jones industrials aloft Monday as selling by year-end profit-takers wiped out early gains and extended the market’s tailspin.

The Dow Jones industrial average ended down 36.52 at 6,268.35, after giving up an early gain of 50 points. The Dow is now down 279.44 points, or 4.3 percent, from its Nov. 25 record of 6,547.79.

Most of the Dow’s early gain was built on Boeing, whose shares rose sharply after the company’s weekend announcement that it would acquire rival McDonnell Douglas in a stock swap valued at $13.3 billion.

However, the rest of the market was weaker. Declining issues led advancers by 2 to 1 on the New York Stock Exchange. Volume on the Big Board was moderately heavy at 447.58 million shares as of 4 p.m., but a little below Friday’s pace.

Broad indexes were narrowly mixed in the morning as technology stocks tried to hang on to slim leads, but lost ground in the afternoon.

The Standard & Poor’s 500-stock index fell 7.65 to 720.99, and the NYSE’s composite index fell 3.22 to 380.85. The Nasdaq composite index plunged 23.93 to 1,260.98, the biggest one-day point drop since the 32.32-point loss of July 23.

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

NYSE

Boeing rose 4-3/8 to 101-1/8.

McDonnell Douglas rose 10-3/8 to 62-3/8.

Boeing agreed to acquire McDonnell Douglas in a stock-swap merger valued at $13.3 billion. Both are aircraft and defense manufacturers.

Morgan Stanley & Co. resumed coverage of Boeing with a strong buy rating, citing the firm’s purchase of Rockwell International’s aerospace and defense operations, completed earlier this month, and the McDonnell Douglas deal, should smooth out Boeing’s earnings cycles.

Eljer Industries Inc. rose 10-1/8 at 23-5/8.

Zurn Industries Inc., down 1-1/2 at 24-5/8.

The Dallas-based plumbing and building-products concern agreed to be acquired by rival Zurn Industries Inc. for $171.6 million in cash, the companies said Monday. The purchase price of $24 a share nearly doubles Eljer’s closing price Friday of $13.50 on the New York Stock Exchange. The shares hit a 52-week high of $14.12 last month.

NASDAQ

Sun Television and Appliances Inc.

Sun stock plunged after Gregg withdrew its offer to acquire the struggling electronics retailer for $87 million. Gregg pulled its offer Friday night - three days after officials had agreed to merge the companies - after it learned Sun’s losses for its third quarter ended Nov. 30 would be worse than had been anticipated.

American Management Systems Inc. fell 6-3/4 to 25-1/8.

The Fairfax Va. business and technology consulting company said net income for the year will be between 81 cents and 85 cents a share, lower than it had previously expected because of a delay in the completion of a large project.