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Spokane, Washington  Est. May 19, 1883

Economic Strength Chills Market

Associated Press

The stock market faltered Tuesday after a robust economic report led to new doubts about the outlook for lower interest rates.

In losing ground, stocks followed the bond market’s lead, which retreated in response to the National Association of Purchasing Management’s upbeat report on conditions in the manufacturing sector.

Lingering euphoria over Monday’s merger news and another takeover development in the media business sustained interest in stocks of companies deemed potential takeover targets and offset some of the negative influence of bonds.

A late recovery enabled blue chip stocks to improve and the Dow Jones industrial average finished well above its worst levels at 4,700.37, off 8.10. At its bottom, the indicator was down around 40 points.

Losers outnumbered gainers by about 13 to 10 on the New York Stock Exchange where volume expanded to 322.22 million shares as of 4 p.m. from 289.84 million Monday.

Selling pressure weighed particularly heavy on technology stocks as investors decided to collect profits.

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

NYSE

Westinghouse Electric, up 1-1/4 to 14-7/8.

The stock was a focus of investor attention as Westinghouse confirmed that it was making a formal offer for CBS, which ended unchanged at 77-3/4. Takeover talk increased Monday after Disney disclosed its intention to acquire Capital Cities/ABC in a $19 billion deal. Disney rose 2-7/8 to 61-1/2 and Cap Cities/ABC rose 3-1/4 to 119-1/2.

Hewlett-Packard, down 2-1/8 to 75-3/4.

Investors sold technology stocks to collect profits. NYSE-listed Motorola lost 1-5/8 to 74-7/8, Micron Technology fell 2-1/8 to 60-1/4 and Compaq fell to 49-7/8.

Digital Equipment, up 2 to 40-3/8.

The company posted earnings for its fiscal fourth quarter of $1.01 a share compared with an operating loss of $1.22 a share a year earlier.

NASDAQ

The Learning Co., up 14-1/2 to 53-1/2.

Broderbund Software will buy The Learning Company for about $440 million, in a move that will expand Broderbund’s position in the educational software market. Nasdaqlisted Broderbund fell 3-15/16 to 68-1/16.

AMEX

New Mexico & Arizona Land, up 1-5/8 to 12-3/4.

Investors responded favorably to news of an improvement in the property company’s quarterly earnings.