Profit Concerns Undermine Stocks

Worries about upcoming third-quarter corporate profit reports continued to plague many investors Tuesday, helping send the stock market mostly lower.

Several companies continued a weeklong trend of issuing statements predicting lower-than-expected earnings, fueling a pessimistic mood.

Some observers remained upbeat, though, saying the decline was simply part of a normal, temporary reaction to a strong September rally.

The Dow Jones industrial average closed 11.56 points lower at 4,749.70.

Declining issues outnumbered advancers by about 7 to 5 on the New York Stock Exchange.

Big Board volume totaled 385.89 million shares as of 4 p.m., up from 304.88 million on Monday. Volume declined sharply around 10 a.m. PDT, the time of the O.J. Simpson acquittal, but the verdict that fixated the nation didn’t disturb the day’s stock trend, analysts said.

“You have queasiness in anticipation of the upcoming earnings season,” said Jon Groveman, president of Ladenburg, Thalmann & Co. in New York. Expectations for strong profit increases in the technology sector have driven those stocks up for months, so some investors are taking profits before the actual reports, he said.

Some of the stocks that moved substantially Tuesday:

NYSE

Prudential Reinsurance Holdings Inc., closed at 19-5/8, up 2-7/8 from an initial public offering of 16-3/4.

Prudential Insurance Co. spun off its reinsurance business to a welcome investor reception, analysts said.

USAir Group Inc., up 1 to 12-5/8.

The troubled airline disclosed late Monday that it might be sold to United or American airlines. United parent UAL Corp. was off 6-1/8 to 166-5/8. American parent AMR Corp. fell 2-1/8 to 68-1/2.

Motorola Inc., down 1-1/2 to 74-7/8.

The Schaumburg, Ill., electronics company said it would cut prices on six computer modems used by business by as much as 25 percent.

NASDAQ

Systems & Computer Technology Corp., down 6-1/2 to 19-5/8.

The Malvern, Pa., computer management services company said its quarterly earnings will be below its expectations. Reasons include lower fees from software licenses and higher costs in several businesses.

AMEX

North American Vaccine, up 1/4 to 11.

The Beltsville, Md. vaccine company signed a deal to jointly develop a vaccine for meningitis B with the French firm Pasteur Merieux-Connaught.