Dow Loss Snaps Stock Market’s Six-Day Surge

And on the seventh day, the stock market rested.

After climbing to record highs for six straight days, the Dow Jones industrials average retreated Thursday. Broader market indicators were mostly lower.

A late wave of computer-driven selling erased modest gains and sent the Dow industrials down 31.07 points at the close to 5,074.49.

“The market just fell off a cliff at 3 o’clock,” said Richard Dickson, a technical analyst at Scott & Stringfellow Inc. in Richmond, Va. “It had to be program trading. There’s no other explanation.”

The blue-chip index started the day softer but climbed into moderately positive territory in the early afternoon, gaining as much as 13 points and giving every indication that it could close the seventh session in a row with a new high.

But Philip Roth, a technical analyst at Dean Witter Reynolds Inc., said sell programs on the last day of the month “often produce wild swings,” as portfolio managers tinker with index-related portfolios.

Despite the loss in the Dow, advancers led decliners by about 4 to 3 on the NYSE.

Some of the stocks that moved substantially Thursday:

NYSE

Rite Aid rose 2-5/8 to 31-1/4.

Revco rose 2-1/8 to 27-5/8.

The nation’s top two drugstore chains announced plans to merge in a $1.8 billion cash and stock deal. The buyout will create a company with more than $11 billion in revenue and more than 4,500 stores in 22 states. Rite Aid is based in Camp Hill, Pa., and Revco in Twinsburg, Ohio.

Deere rose 2 to 33.

The construction and farming equipment maker said its fourth-quarter earnings fell 11 percent, weighed down by a reduction in parts production and lower prices for used equipment it sells.

Texas Instruments fell 1-5/8 to 57-7/8.

Micron Technology fell 1/8to 54-3/4.

Goldman Sachs lowered its 1996 earnings estimates on these memory chipmakers, saying prices for DRAM, or dynamic random access memory, chips could fall 15 percent to 20 percent, rather than 14 percent to 15 percent. Goldman kept its “buy” rating on both stocks.

Conrail fell 4 to 69-7/8.

The rail company’s shares fell sharply after analysts dispelled merger rumors that boosted the stock late Wednesday. Also, Schroder Wertheim reportedly downgraded the stock to market perform from outperform market significantly, according to market sources.

NASDAQ

Pixar rose 1-3/4 to 40-3/4.

The digital video company’s initial public offering extended Wednesday’s 17-point gain after being priced at 22.