Profit-Takers Limit Market’s Gains
Stocks ended Monday’s session with the Dow Jones industrial average up 7.22 at 5,643.86.
Declining issues edged out advancers on the New York Stock Exchange, where volume was light at 334.72 million shares as of 4 p.m..
With the end of the third quarter coming this Sunday, investors were anxious to sell good performers in order to mark profits, or to unload less-than-stellar names.
“The market’s nervous that there won’t be enough earnings growth to sustain the upward movement in equity prices,” said James Weiss, deputy chief investments officer at State Street Research in Boston.
Some of the stocks that traded heavily or moved substantially:
Merck fell 1 to 62-1/2.
The pharmaceutical maker last week warned doctors of potentially serious stomach irritations associated with its Fosamax drug for osteoporisis.
Eli Lilly rose 1-3/8 to 66-1/4.
Merrill Lynch upgraded the stock to near-term buy from accumulate.
Anixter International fell 2-1/4 to 16-1/2.
The networking and cabling company said first-quarter sales and earnings will be below analysts’ estimates of 22 cents a share, and earnings will be equal to or slightly lower than last year’s 19 cents a share. Anixter cited slower growth, most noticeably in North America, tied to a significant restructuring of its sales force in the fourth quarter. Anixter also cited a slowdown in sales growth in Europe.
Philips Electronics’ American depositary shares fell 4-5/8 to 36-3/4.
The Dutch consumer electronics company warned that net income from normal business operations in the first quarter of 1996 will be ‘substantially lower’ than the ‘excellent’ first quarter of 1995. The company cited weak market conditions for consumer electronics in Europe and the United States.
C-Cube Microsystems fell 12 to 42-3/4.
The company’s shares fell after IBM unveiled a line of chips that will compete with C-Cube’s moving pictures expert group products, an international standard for the encoding and decoding of digital video and audio information.
Egghead rose 1-5/8 to 9-1/4.
Software Spectrum rose 3 to 22-3/4.
Software Spectrum Inc. agreed to acquire Egghead’s corporate, government and education division for $45 million. Meanwhile, Egghead said it expects to report a net loss for the quarter of about $2.7 million, or 16 cents a share, compared with earnings of $934,000, or 5 cents a share, a year ago. Analysts had expected the company to break even.
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