Stocks Pull Back In Step With Bond Market

Blue-chip stocks succumbed late Thursday to pressure from the bond market, closing in negative territory for the second day in a row. The broad market ended mostly lower.

The Dow Jones industrial average fell 28.18 to 5,551.37, extending a loss of 21 points on Wednesday that broke a seven-day run of record highs. It still was the fourth-highest finish ever for Wall Street’s best-known indicator.

Advancers maintained a slim lead on the New York Stock Exchange for most of the session, but gave up the lead in the final minutes to trail decliners by 9 to 10. Big Board volume was moderately heavy at 410.36 million shares as of 4 p.m., down from Wednesday’s pace.

Traders said computer-driven selling programs were responsible for more than 10 points of the loss in the Dow, ahead of today’s double expiration of options and futures contracts.

Larry Wachtel, a market analyst at Prudential Securities, said the retreat was focused on blue-chip issues because those had made the biggest gains earlier this month.

“The Dow has gone nuts, so the Dow must correct,” Wachtel said. “But the breadth is even keel, the market has been even keel. It’s an ordinary day, (with) just about as many stocks up as down.”

Some of the stocks that moved substantially Thursday:

NYSE

America West Inc. rose 3/8 to 19-3/4.

The airline priced 6.633 million shares of common stock at $19.50 late Wednesday.

Royal Dutch fell 7-1/4 to 138-1/4.

Royal Dutch/Shell Group of Cos. said fourth-quarter net income fell 53 percent, to 768 million pounds.

Humana Inc. fell 1-5/8 to 25-5/8.

The shares fell 5.2 percent Wednesday, after the company mentioned in its fourth-quarter earnings report that it had experienced a 25,000-member decrease in commercial enrollment in January. The company reported that fourth-quarter premium revenue grew 59 percent to $1.5 billion from $920 million during the same period a year ago.

NASDAQ

Gibson Greetings Inc. fell 1-1/2 to 14.

The Cincinnati-based card maker fired its chairman and removed itself from the selling block. Gibson said it earned 49 cents a share in the fourth quarter, compared with a loss of 7 cents a share a year ago.

AMEX

TWA rose 3-1/8 to 16.

On Wednesday, the airline reported its best financial picture in 10 years, cutting its fourth-quarter net loss to $27.8 million from $245.23 million a year ago and posting a narrow operating gain.