Stock Market Backs Away From Record High

Stocks fell from record highs on Friday, led by financial and technology shares, as bond prices slipped and the market reacted to mixed earnings reports.

The Dow Jones industrials ended down 7.59 at 4,794.86, easing off of Thursday’s record-high close at 4,802.45. Wall Street’s best-known indicator still added 1.08 points for the week.

Although the Dow traded within a narrow 22-point band all day, blue-chip stocks were volatile, bouncing back and forth several times from negative to positive camps. Traders said Friday’s double expiration of futures and options added volatility.

Declining issues led advancers by about 7 to 5 on the New York Stock Exchange. Big Board volume was moderately heavy at 388.13 million shares as of 4 p.m., down from 406.62 million on Thursday.

“The breadth is bad, still negative,” noted Jim Harrick, a stock trader at Robert W. Baird & Co. in Milwaukee. “Overall, the market looks sloppy.”

In addition to technical factors, stocks also gave ground in sympathy with bonds. The 30-year Treasury bond was down 11/16 points and yielding 6.53 percent late in the session after Alan Greenspan, the chairman of the Federal Reserve, said late Thursday that the Fed must continue to be vigilant against inflationary pressures.

Bond investors interpreted his comments to mean that inflation is serious enough that the Fed is not likely to cut interest rates soon. They were not assuaged when Greenspan on Friday suggested that the consumer price index might overstate inflation.

“There was a bit of a disappointment to some this morning with repeated remarks from Greenspan about potential warming up of wage inflation concerns,” said Ed Lavarnway, the top stock trader at First Albany Corp.

Some of the stocks that moved substantially Friday:

NYSE

AT&T fell 1-1/4 to 61-1/4.

The telephone giant said Thursday that its third-quarter earnings plunged 75 percent after a $1.6 billion restructuring charge.

Silicon Graphics fell 1-3/4 to 32-1/4.

The company, whose computers are best known for movie special effects, reported a 27 percent jump in first-quarter profits to 33 cents per share from 26 cents a year ago, and said it would buy back up to 7 million shares. But the profit results were 1 penny shy of analysts’ expectations.

LSI Logic fell 5-1/2 to 49-5/8.

Third-quarter net income at the Milpitas, Calif. semiconductor maker rose to 50 cents per primary share, from 26 cents a year ago. That beat analysts expectations by a few cents.

NASDAQ

Amgen fell 4-1/4 to 46-1/8.

The biotechnology company reported third-quarter net earnings of 52 cents per share, up 28 percent from 41 cents a year ago. While the earnings met analysts’ expectations, sales of the company’s cancer chemotherapy drug, Neupogen, were disappointing.

Genus Inc. fell 3-3/4 to 9-3/8.

The Sunnyvale, Calif.-based maker of computer semiconductor equipment said third-quarter earnings rose to 14 cents a share from 9 cents on fewer shares outstanding. But the results were 2 cents below analysts’ expectations. Montgomery Securities downgraded the stock to “hold” from “buy.”