New Inflation Jitters Extend Dow’s Retreat
Technology stocks and smaller-company shares rose to record highs Thursday, but the broad market struggled again as a sudden wave of inflation jitters escalated.
The Dow Jones industrial average fell 33.64 to 8,061.42 after recovering from an early 92-point drop that nearly dragged the blue-chip barometer below 8,000.
The technology-heavy Nasdaq composite index and the Russell 2000 index of smaller companies rose to record highs after erasing their early losses.
But most stock indexes recovered only partially from an opening slide that came as interest rates shot higher again in the bond market after hitting a 1-1/2-year low on Tuesday.
Bonds rebounded in the afternoon after sinking twice early Thursday, once after the German and French central banks boosted lending rates to protect against inflation, and again after a report showing more upward pressure on U.S. wages, the dominant force behind inflation.
Declining issues outnumbered advancers by a 3-to-2 margin on the New York Stock Exchange, where volume was heavy again at 549.79 million shares as of 4 p.m. but down from 572.27 million on Wednesday.
Some of the stocks that moved substantially or traded heavily Thursday:
Chrysler, up 3/8 at 34-3/8.
A jury Wednesday ordered Chrysler to pay $262.5 million to the parents of a 6-year-old boy who was killed when he was thrown from the family minivan in an accident because a rear latch was defective.
GTE, down 2-7/16 at 49-13/16.
J.P. Morgan and Brown Brothers Harriman downgraded the telecommunications stock, the Dow Jones News Service reported. The stock had risen in recent days amid news that GTE has discussed a potential takeover by AT&T.;
Saks Holdings, up 1-5/8 at 24.
The retailer reported that sales from stores open at least a year rose 5 percent in September. Overall sales rose 14.6 percent compared with the same period a year ago.
SCM Microsystems, up 6-1/8 at 31-1/2.
The smartcard technology concern rose again in its second day of trading after Tuesday’s initial public offering of 3.37 million shares at $13 apiece.
Biogen, down 5/8 at 33.
The drug maker posted a third-quarter profit that was slightly shy of many analyst forecasts. Biogen reported its results after Wednesday’s close.
Ben & Jerry’s Homemade, up 1-7/8 at 14-1/2.
Josephthal Lyon & Ross initiated coverage on the ice cream company with a “buy” rating and added the stock to its focus list, the Dow Jones News Service reported.
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