Stocks Seesaw As Fed Boosts Key Interest Rate

A Federal Reserve interest-rate hike Tuesday sent stocks seesawing and left investors wondering if the central bank would tighten rates again this year.

Blue-chip stocks and bank shares retreated on the news of the small rate increase, the first rise in more than two years. But technology stocks managed to hold on to their gains after a recent battering.

The Dow Jones industrial average fell 29.08 to 6,876.17, erasing a 47-point gain that came immediately following the much-anticipated Fed announcement. While the Fed’s action was no surprise, the wording of the announcement led to speculation that the central bank was not finished raising rates this year.

“There is a risk that this could be the beginning of a series of tightening moves,” said Sung Won Sohn, chief economist at Norwest Corp. in Minneapolis.

“What happened today is already history,” he said. “The market is already speculating what is next.”

Advancing issues outnumbered decliners by a 10-to-9 margin on the NYSE, where volume totaled 480.38 million shares as of 4 p.m., vs. 442.16 million in the previous session.

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

NYSE

Global Directmail, down 8-1/8 at 19-7/8.

The Port Washington, N.Y., direct marketer of computer, office and industrial supplies said its net income for the first quarter ending March 31 will be in line with net income of 31 cents a share for the first and fourth quarters of 1996. Wall Street analysts had expected net income of 36 cents a share for the quarter ending this month.

Exxon, up 1-3/8 at 105-7/8.

The Irving, Texas, oil company plans to boost the number of shares it will repurchase under its buyback program but declined to disclose an exact number or value.

PacifiCorp, up 1 at 21-3/4.

PacifiCorp Holdings Inc., a unit of PacifiCorp, received Federal Trade Commission antitrust approval to proceed with its $228 million acquisition of TPC Corp.

NASDAQ

Integrated Systems Inc., down 5-3/4 at 11-3/8.

The Suunyvale, Calif.-based company said late Monday that fiscal 1997 fourth quarter and year earnings will fall short of analysts’ expectations.

AML Communications, down 2-7/16 at 4-5/16.

The Camarillo, Calif.-based maker of telecommunications software expects to report earnings for the fourth quarter and year ending March 31 “substantially short” of analysts’ estimates.

Network Peripherals, down 2-1/8 at 8-5/8.

The Milpitas, Calif.-based company said late Monday that it expects to report an after-tax, first-quarter loss of up to 8 cents a share.