Dow Falls As Investors Weigh Budget Moves

Stocks retreated with bonds Tuesday as investors braced for market reaction to the State of the Union address, which was expected to prompt more posturing in the federal budget deadlock.

The Dow Jones industrial average lost 27.09 to finish at 5,192.27, erasing most of the prior day’s gain that had put the blue-chip index into record territory.

The Dow average had been down more than 40 points late in the session, paring some losses toward the close.

Declining issues outnumbered advancers by a thin margin on the New York Stock Exchange. Volume on the floor of the Big Board came to 412.98 million shares as of 4 p.m., up from from 396 million in the previous session.

In the absence of any noteworthy progress on the budget standoff, “it was reasonable that (the Dow industrials) would back off,” said Michael LaTronica, market analyst at Gruntal Securities.

With inflammatory comments from both sides of the debate jogging financial markets in recent weeks, investors grew cautious before Tuesday night’s address by President Clinton and the Republican response.

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

NYSE

Digital Equipment, up 2-1/2 at 70.

The company reported a profit of 91 cents a share for the quarter, up from 7 cents a year earlier and higher than analyst forecasts.

Walt Disney, unchanged at 60-1/2.

The entertainment conglomerate said its profits rose 3 percent in the final quarter of 1995 as movie revenues improved 15 percent on the strength of box office smashes such as “Toy Story.”

Hecla Mining, down 1/4 at 8-1/4.

The company said it has sold about 2.9 million of its shares to Salomon Brothers for $8.25 apiece, or about $23.7 million, to help fund its 1996 capital expenditures. Hecla said it will use the money primarily to pay for the reopening of a mine near Juneau, Alaska.

NASDAQ

Sun Microsystems, down 4-7/16 at 44-1/8.

Apple Computer, up 1-1/8 at 31-5/8.

The Wall Street Journal reported that Sun is preparing a $4 billion bid to acquire the struggling pioneer of the personal computer, and that Apple is expected to accept. The market’s response indicated expectations that other bids might surface.

AMEX

Portage Industries, up 1-5/16 at 5-13/16.

Spartech Corp. of Clayton, Mo., is offering $15 million, or $6.60 a share, in cash to acquire Portage, a maker of plastic sheets based in Portage, Wis.