Dow Dips As Investors Anticipate Fed Action

Stocks turned mostly lower Thursday as interest rates shot up in the bond market on worries about today’s report on February employment and more signs the economy may be too robust to keep inflation in check.

The Dow Jones industrial average fell 1.15 to 6,944.70. The blue-chip barometer, which gained 93 points on Wednesday, surrendered an early 42-point advance.

Bellwether technology issues suffered the sharpest losses, faltering after several sessions of recovery from the recent profit-taking in that high-flying sector.

Stocks started the day higher, but turned lower with the bond market as Wednesday’s optimism over some fairly tame remarks by Federal Reserve Chairman Alan Greenspan gave way to jitters about this morning’s reading on payroll and wage levels, a key force behind production costs and inflation.

Heightening anxieties in advance of that report was Thursday’s news that orders to U.S. factories posted unexpectedly strong gains in January and the number of first-time claims for jobless benefits plunged last week, pushing the four-week average to an eight-year low.

Advancing issues outnumbered decliners by a narrow margin on the New York Stock Exchange, where volume totaled 522.48 million shares as of 4 p.m., down slightly from Wednesday’s pace.

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

NYSE

Great Western Financial, up 1-7/8 at 46-7/8.

H.F. Ahmanson & Co., down 1-1/4 at 40-3/4.

Great Western agreed to be acquired by rival S&L operator Washington Mutual for stock valued at $6.6 billion, or nearly $48 a share.

Allwaste, up 2-19/64 at 9-3/64.

Serv-Tech (Nasdaq), up 13/16 at 5-7/8.

Canadian metals-processing concern Philip Environmental agreed to acquire the two Houston-based environmental-services companies for a combined $612 million in stock and assumed debt.

Harte-Hanks Communications, up 3 at 29-3/4.

The San Antonio-based media concern plans to sell its newspapers and television stations to focus on direct marketing and shoppers guides, which generate 75 percent of the company’s revenues.

Best Buy, up 1-1/8 at 9-3/4.

The electronics retailer posted a smaller-than-expected drop in February sales at stores open at least a year.

NASDAQ

Ariad Pharmaceuticals, up 1-1/4 at 8.

Hoechst of Germany agreed to buy 2.5 million Ariad preferred shares for $24 million as part of a new gene research venture.

Atmel, down 1-1/8 at 31-1/2.

Alex. Brown & Sons lowered Atmel to “buy” from “strong buy,” the Dow Jones News Service reported, citing a contact at the investment firm.