Dow Plunges In Massive Sell-Off

The Dow Jones Industrial Average closed down 81.95 points at 4340.65, posting its biggest one-day drop in six months as an early slip related to today’s May equity options expiration turned into a profit-taking sell-off by late in the day.

Cyclical stocks led the way down, with the technology sector - the market leader in recent sessions - succumbing in the final hour.

Anaylsts said there are some worries that the slowing U.S. economy will hurt corporate earnings in the second and third quarters.

But they said Thursday’s drop probably had more to do with worries that the Dow has gone straight up without a correction for too many months.

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

NYSE

Micron Technology rose 4 to 94.

SoundView Financial, a Connecticut brokerage that specializes in technology issues, had some positive things to say about Micron at a morning sales meeting, a source at SoundView said.

Johnson & Johnson fell 2 1/8 to 62.

Bristol-Myers Squibb fell 1 1/2 to 63 5/8.

Pfizer fell 1 5/8 to 81 5/8.

Johnson & Johnson warned Wednesday that analysts’ 1995 earnings estimates of $3.62 per share were “a little on the high side.” The company earned $3.12 last year on sales of about $16 billion. Johnson & Johnson’s announcement at an Alex. Brown health care seminar sent other health care stocks falling.

NASDAQ

Orion Pictures rose 15-16 to 7 1/8.

CNBC commentator Dan Dorfman said an analyst whose firm controls about 22 percent of the stock told him Orion shares should double by year-end.

Sahara Gaming rose 5/8 to 6 1/2.

Circus Circus Enterprises fell 1 1/4 to 33 1/4.

CNBC commentator Dan Dorfman said he heard that William Bennett, former chairman of Circus Circus, may bid for Sahara.

Ultratech Stepper fell 1 1/4 to 33 1/2.

The company offered 2.4 million common shares at $34 each. The size of the offering was increased from an original 2 million shares.

AMEX

Forest Labs fell 5 3/8 to 41 1/4.

The pharmaceutical maker said late Wednesday that the U.S. Food and Drug Administration had not approved its Infasurf new drug application, saying it was the “same drug” as Abbott Laboratories’ Survanta product for respiratory distress in premature infants. Forest said Abbott’s patent infringement claim was without merit.