Earnings Reports Send Dow Down

Stocks fell sharply Monday as the corporate earnings outlook weakened and the dollar declined.

The Dow Jones industrial average slid 42.99 to close at 4,726.22 The blue-chip index dropped more than 50 points in early trading, prompting the New York Stock Exchange to restrict program trading, also known as computer-driven trading.

While the Dow Jones industrials slipped less than 1 percent, the technology-heavy Nasdaq Stock Market’s composite index tumbled 2.7 percent, falling to its lowest closing level since Aug. 2.

Declining issues led advancers by about 13 to 5 on the Big Board. Volume was relatively light because of the Columbus Day holiday, with a revised 275.29 million shares changing hands on the Big Board as of 4 p.m., down from 313.63 on Friday.

“We’re long overdue for a correction,” said Peter Anderson, chief investment officer at IDS Advisory Group in Minneapolis.

Some of the stocks that moved substantially:

NYSE

Micron Technology fell 5-5/8 to 65.

Texas Instruments fell 4-1/2 to 70-3/8.

National Semiconductor fell 7/8 to 24-3/4.

IBM fell 2-1/8 to 92.

Computer stocks fell broadly after several technology companies warned of disappointing earnings.

Scientific-Atlanta fell 3 to 12-5/8.

The company said Friday that first-quarter net income will be “substantially” below estimates after it takes a charge of 17 cents per share.

Champion International fell 7/8 to 50-3/8.

The paper maker’s third-quarter net earnings were $2.47 per share, up from 18 cents a year ago, because of an increase in paper prices. But the company’s profits from wood products fell with lumber prices.

NASDAQ

Novell fell 2-3/4 to 14-5/8.

The software maker said Friday that its fourth-quarter earnings would be below analysts’ expectations because of soft sales of its applications software.

DSC Communications fell 5-1/8 to 39-1/4.

The Dallas-based company, which develops and sells digital network system products, said third-quarter earnings will be lower than analysts expected because of a slow-down in switching system revenues and in its European business. For the third quarter ended Sept. 30, 1994, DSC reported net income of $43.2 million, or 37 cents per share, on revenues of $260.6 million.

Intel fell 1-7/8 to 60-1/8.

Microsoft fell 2-3/4 to 83-1/8.

The industry leaders were caught up in the technology selloff.