Profit-Taking Stalls Market’s Surge

Stocks gave up a substantial lead on Wednesday to finish barely higher, as investors ignored sharply lower interest rates and instead sold their equity holdings to lock in profits.

The Dow Jones industrial average ended up 1.72 at 4,438.16, squeaking past its all-time high set last Monday to another record.

But Wednesday’s slim gains signaled no particular conviction on the part of investors. The blue chip index shot up 23 points at the open. It lost those gains to drop close to unchanged for most of the session, dipped briefly into negative territory but then rallied into the close.

The advancing issues outnumbered decliners by a slim 7-to-6 margin on the New York Stock Exchange. Big Board volume was heavy at 391.76 million shares as of 4 p.m., up from 362.67 million on Tuesday.

Stocks got off to a good start, and the Dow rose 23 points after the opening bell, as bonds shot up following a report of weak factory orders.

At first, stock investors followed bonds higher. But they quickly began to worry that the economy may be declining enough to begin eating into corporate earnings.

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

NYSE

Merck & Co. rose 1 3/4 to 44 1/2.

Pfizer rose 1 1/2 to 85 7/8.

Eli Lilly rose 5/8 to 73 5/8.

Warner Lambert rose 7/8 to 80 1/2.

Drug stocks, a popular defensive play in a falling economy, rose after economic data showed the economy is slowing further.

Chrysler fell 1/2 to 42 1/8.

Ford fell 5/8 to 28 7/8.

General Motors fell 7/8 to 46 3/8.

Auto stocks fell along with other deep cyclical issues, as investors got more confirmation that the economy is slowing.

In addition, the stocks fell after automakers in the United States and Japan announced a recall of more than 8 million cars with faulty seatbelts.

IBM fell 1 1/4 to 96.

Micron Technology fell 2 3/4 to 47.

Texas Instruments fell 1 to 123 3/8.

National Semiconductor fell 1 1/4 to 26 5/8.

Investors sold technology issues, which have been outstanding performers lately, to lock in profits.

NASDAQ

Oracle Systems rose 2 3/4 to 37 5/8.

Goldman Sachs had positive comments about the company, noting that its business is strong.

Michael Stores fell 7 1/2 to 24 3/4.

The retailing chain reportedly recommended that analysts lower their earnings estimates on the company by between 20 cents and 25 cents per share.