Ibm Sell-Off Kills Blue-Chip Rally
Smaller-company stocks coasted to another record high on Tuesday, but efforts to revive the blue-chip sector fizzled again amid nagging worries about company profits and inflation.
The Dow Jones industrial average was up nearly 64 points about an hour before the close, but rose just 16.73 to 7,851.91 in a repeat performance of Monday’s afternoon stumble, which left the blue-chip barometer with a feeble 12-point gain.
This time, the Dow’s advance was undercut by a late sell-off in the shares of IBM, which fell 2-7/8 - or the equivalent of 10 Dow points - to 100 amid speculation that the computer giant’s third-quarter profits won’t meet expectations.
Since surging a record 247 points two Mondays ago, the Dow has traded in a narrow band, losing about 28 points over the ensuing five sessions.
Smaller-company shares, meanwhile, have been soaring to new heights. On Tuesday, the Russell 2000 index of secondary stocks cruised to its ninth consecutive record close.
Advancing issues outnumbered decliners by a 9-to-7 margin on the New York Stock Exchange, where volume totaled 502.11 million shares as of 4 p.m., up from Monday’s modest tally of 466.44 million.
Some of the stocks that moved substantially or traded heavily Tuesday:
NYSE
Columbia/HCA Heathcare, down 3-1/16 at 29-5/8.
The nation’s largest for-profit hospital chain estimated that costs from dealing with a sweeping probe of Columbia’s billing practices will reduce third-quarter earnings by $60 million.
Corning, down 4-1/2 at 49.
The stock fell amid reports suggesting the glass maker is facing trouble in its optical fiber business.
Campbell Soup, up 1-5/16 at 51-11/16.
The Camden, N.J.-based food company exceeded analyst forecasts with a $192 million profit for its fourth quarter ended Aug. 3, reported after Monday’s close. on Tuesday, Goldman Sachs raised its rating and 1998 earnings estimate for Campbell, the Dow Jones News Service reported.
NASDAQ
Keravision, up 3-1/16 at 10-3/16.
The company reported encouraging results from clinical trials with its KeraVision Ring to correct nearsightedness.
Telco Systems, up 2-3/8 at 15-7/8.
The networking technology concern announced that it will likely post better-than-expected results for its fourth quarter ended Aug. 31, returning to profitability for the period.