Dow Wavers, Slips Below 4,000

Stocks ended lower on Wednesday, after the Dow Jones industrials labored for most of the session to stay above the 4,000 mark, then capitulated in the last hour of trading.

The Dow index closed down 16.25 points at 3,994.80 after tracking the bond market and interest rates throughout the session.

The 30-year bond closed down 1-32 point, yielding 7.44 percent, after wavering between gains and losses all day.

On the New York Stock Exchange, decliners led advancers by about 5 to 4. Big Board trading volume was moderately heavy at 362.56 million shares as of 4 p.m., up from 317.16 million Tuesday.

The market got conflicting news on the economy. The Commerce Department reported that the nation’s gross domestic product expanded at a rapid annual rate of 4.6 percent in the last quarter of 1994. The expansion was slightly more robust than the department’s month-old estimate of 4.5 percent, and higher than analysts expected.

The GDP report also indicated that inventories were declining and final sales were picking up, both signs of a strengthening economy.

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

NYSE

Caterpillar fell 1 3/8 to 50 1/4.

The company confirmed Smith Barney downgraded its stock to “outperform” from “buy.”

Alcoa fell 1 to 38.

Goldman Sachs downgraded the stock to “market performer” from “trading buy,” saying that although fundamentals in the aluminum business are good, Alcoa stock is “acting as a proxy” for other economically sensitive stocks that are declining.

Texas Instruments rose 2 1/4 to 81.

Micron Technology rose 2 7/8 to 64 7/8.

Texas Instruments said it expects the world market for semiconductors to grow 21 percent in 1995.

Wal-Mart rose 5/8 to 24 3/8.

The discount retailer said fourthquarter profits were 45 cents per share, compared with 38 cents a year ago.

NASDAQ

America Online rose 11 1/4 to 82 1/4.

The computer online network service said its subscriptions are growing faster than expected. It also announced a joint venture with Bertelsmann AG into the European market.

AMEX

Viacom/B rose 1 to 45 3/4.

The company told investors its operating cash flow would be up 25 percent this year.