Late Surge Saves Dow From 130-Point Plunge
A late surge of bargain hunting left most stock measures only slightly lower Wednesday as investors continued to puzzle over how much U.S. companies are being hurt by the economic crisis in Asia.
The Dow Jones industrial average, down nearly 130 points in the early afternoon, finished just 3.98 lower at 7,902.27 after mounting an 85-point rally over the final 15 minutes of trading.
The late rally also wiped out the bulk of the day’s losses for most broad-market indicators, but the technology group, considered most vulnerable to the troubles overseas, lagged the rebound.
“The market abhors uncertainty, and that’s what we’ve got a lot of,” said John Cleland, chief investment strategist at Security Benefit Group in Topeka, Kan. “The real uncertainty is what the Southeast Asian problems mean for corporate earnings throughout 1998, so we’re in for a choppy market for a while.”
Declining issues outnumbered advancers by a 3-to-2 margin on the New York Stock Exchange, where volume totaled 655.88 million shares as of 4 p.m., exceeding the hefty tallies recorded on Monday and Tuesday.
Some of the stocks that moved substantially or traded heavily Wednesday:
NYSE
Black & Decker, up 3-9/16 at 41-7/8.
The maker of power tools, hardware and appliances expects to beat analysts forecasts for its fourth-quarter earnings. Black & Decker attributed its strong results to new products and promotional efforts.
Best Buy, up 3-7/8 at 41-3/4.
The Minneapolis-based electronics chain reported that its December sales exceeded company forecasts and said it expects to beat analyst estimates for fourth-quarter profits. Best Buy said its December sales from stores open at least a year rose 12.6 percent, while overall sales rose 17 percent.
NASDAQ
Atmel, down 2 at 17-3/8.
The semiconductor maker warned late Tuesday that it will post an unexpected loss for the fourth quarter and that the outlook for 1998 is uncertain. Atmel said some Asian customers were unable to arrange credit to pay for shipments scheduled for December.
Rainforest Cafe, down 12-3/16 at 18-9/16.
The restaurant chain cautioned late Tuesday that it will post disappointing fourth-quarter profits. Rainforest’s sales from its three facilities open more than 18 months fell 11 percent compared with the fourth quarter of 1996, and sales at three newer locations were disappointing.
Teledata Communications, down 8-1/8 at 11-15/16.
The Israeli manufacturer of telecommunications network equipment expects its first-quarter revenues to decline from year-ago levels and warned that 1998 profits will be lower than 1997’s due to higher development and marketing costs.