Profit-Taking Sends Dow Down 9.4

Stocks drifted lower on Monday, as investors persisted in light profit-taking that began late Friday.

The Dow Jones industrials fell 9.40 to 4,784.38, after trimming a loss of more than 20 points posted earlier in the session. Declining issues led advancers by about 4 to 3 on the New York Stock Exchange. Big Board volume was light at 299.48 million shares.

Broad market indexes turned uniformly lower late in the session after putting in a mixed morning.

Gail Dudack, a market analyst at UBS Securities, said she expected the stock market to be volatile for a while. Earnings gains in the third quarter will not be as impressive as they were earlier this year, she said.

The key, Dudack asserted, is bond yields. If long-term bond yields fall below 6 percent “in an environment of decent earnings but lowered expectations, that could be positive.”

Some of the stocks that were active or moved substantially:

NYSE

Kmart fell 7/8 to 10-1/2.

The discount retailer said reports that it may seek bankruptcy protection are “inaccurate and misleading.” The Wall Street Journal’s “Heard on the Street” column on Monday suggested that analysts believe bankruptcy would be a good idea.

Levitz Furniture fell 1-3/8 to 4-1/2.

Montgomery Ward Holding Corp. canceled a proposed deal to acquire 19.6 percent of Levitz for $65 million. Montgomery Ward had agreed to buy about 7.2 million Levitz shares for $9 a piece and to increase its stake in the Bocaa Raon, Fla., furniture retailer to 42 percent. Chicago-based Montgomery Ward said it had decided the two companies weren’t a good fit.

Timberland fell 4-3/16 to 22-1/2.

The stock was down more than 18 percent on heavy volume. The Strathem, N.H. outdoor apparel and shoemaker declined comment, citing prior company policy.

NASDAQ

Intel rose 3/8 to 63-1/8.

Investors drove the stock higher in ancitipation of the company’s announcement of third-quarter earnings after the close of trading on Monday. The software maker posted net profits of $1.05 per share, in line with analysts’ expectations.

Dell Computer rose 1-1/4 to 84-1/4.

The company unveiled 24 new personal computer systems.

Cirrus Logic fell 5-5/8 to 40-1/4.

Cowen & Co. downgraded the stock to “buy” from “strong buy.” The Fremont, Calif. company makes architectural systems for computers.