Mixed Economic News Drives Stocks Lower

Stocks drifted lower in light trading Thursday, following the release of mixed economic data and a continued sell-off in computer-related shares.

The Dow Jones industrial average fell 28.54 points to 5,626.88.

“It’s pretty mixed with a definite downside bias,” said James Solloway, research director at Argus Research. He said cyclical stocks - those sensitive to changes in the economy - were also among the losers, “which doesn’t surprise me considering how strong they have been.”

Despite the drop in the Dow, advancing issues edged out decliners on the New York Stock Exchange. Volume was moderate at 365.35 million shares as of 4 p.m., well below Wednesday’s pace.

Stocks got a little boost from bonds, where the 30-year benchmark Treasury bond was up 7-32 point late in the day and yielding 6.61 percent. Bonds firmed early in the session after release of several economic reports.

The Labor Department said new claims for unemployment benefits rose 32,000 last week. That was less than economists expected, suggesting the economy is stronger than they had thought.

Separately, in an indication that the economy is not entirely on the mend, the Commerce Department said business inventories jumped 0.6 percent in January.

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

NYSE

Philip Morris fell 2-3/4 to 87-3/4.

The stock resumed falling, after posting a 3-point gain Wednesday. The stock has lost 20 points since late last week amid allegations that the company manipulates nicotine levels in cigarettes to keep smokers addicted.

IBM fell 2-1/8 to 114-7/8.

Digital Equipment fell 2-3/4 to 53-1/4.

Hewlett-Packard fell 2-7/8 to 94-3/4.

Compaq fell 1/8 to 38.

Computer stocks continued to fall amid resurgent concerns about the health of personal-computer sales.

Sunbeam Corp., rose 1-1/4 to 19-3/4.

Shares of the small-appliance maker, which is based in Fort Lauderdale, Fla., rose on takeover rumors, traders said.

NASDAQ

Cisco Systems fell 1-1/4 to 44-3/4.

3Com fell 7/8 to 42-1/8.

Computer networking stocks fell with other computer issues, amid mounting concern about the health of personal-computer sales.

AMEX

TWA rose 3/4 to 18-5/8.

TWA reinstated a lawsuit against Las Vegas-based travel agencies affiliated with investor Carl Icahn over the sale of TWA tickets.