Stocks Are Mixed At Close As Early Rally Fades
Stocks ended mixed Monday in the quietest session in a month, as lingering uncertainty about foreign financial turmoil undermined an early rally.
The battered technology group stumbled anew amid worries about a flaw in Intel’s popular Pentium chip and signs of weak demand for computer disk drives.
The Dow Jones industrial average quickly faltered after an early 75-point gain and fell 28.73 to 7,552.59 by the close. It was the third straight losing session for the Dow, which lost 102 points on Friday when a sharp market drop in Japan set off another wave of selling around the world.
While some Asian markets slipped on Monday, there were no steep declines to make investors second-guess Friday’s partial recovery on U.S. stock exchanges, which nearly halved that day’s losses by the Dow and other measures.
But with no resolution in sight to the Asian financial crisis or the latest U.S.-Iraqi standoff, Monday’s rally quickly lost its momentum.
“On a short-term basis, investors still have more questions than answers,” said Alan Skrainka, chief market strategist at Edward Jones of St. Louis. “But once we get past this period, I think investors will recognize that economic growth is still solid and inflation is low and those are primary drivers of this bull market.”
Some of the stocks that moved substantially or traded heavily Monday:
ITT, down 1-7/8 at 78-7/16.
Hilton Hotels said it will not raise its $10 billion bid for ITT, maintaining that its offer for the hotel and casino giant is better than a sweetened $10.6 billion bid from Starwood Lodging. ITT shareholders will vote on Hilton’s bid Wednesday. Both offers include cash and stock. Hilton is offering $80 a share, while Starwood is offering $85.
Western Digital, down 1-1/7 at 21-3/4.
Applied Magnetics, down 3-7/8 at 17-1/2.
Seagate Technology, down 2-1/16 at 24-3/16.
Disk drive stocks slumped after numerous investment firms downgraded Western Digital, which on Friday warned that it will report disappointing results for the final quarter of 1997.
MCI Communications, up 4-5/8 at 41-1/2.
WorldCom, down 2-3/16 at 30-15/16.
GTE (NYSE), up 1-1/4 at 44-7/8.
British Telecommunications (NYSE), up 2-1/2 at 79-1/2.
MCI agreed to be bought by WorldCom, which sweetened its bid to stock worth $51 a share, or $37 billion, beating out GTE and British Telecom. The new company will be called MCI WorldCom. British Telecom, which will receive $7 billion in cash from WorldCom for its 20 percent interest in MCI. WorldCom also would assume $5 billion in MCI debt.
© Copyright 1997 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.