Dow Loses 12.56 As Market Catches Breath
The stock market retreated a bit Tuesday, as another sign of strong consumer spending rekindled inflation fears in the bond market, sending interest rates higher.
Trading was restrained before and after a meeting by the Federal Reserve’s policy makers, who, as expected, left the central bank’s pivotal short-term lending rates unchanged.
The Dow Jones industrial average fell 12.56 to 5,736.26, ending a nine-session winning streak that added more than 325 points to the blue-chip measure.
The more speculative segments of the market outperformed the blue-chip sector for most of Tuesday’s session, lifting the American Stock Exchange to its fourth straight record high, but most broad indicators finished lower.
Declining issues outnumbered advancers by a slim margin on the New York Stock Exchange, where volume totaled 409.60 million shares as of 4 p.m., slightly heavier than Monday’s pace.
Some of the stocks that moved substantially or traded heavily Tuesday:
NYSE
Morrison Knudsen, down 1/2 at 1.
The stock tumbled on its first day of trading since the troubled construction company agreed to be acquired by Washington Construction Group. Under the proposed $250 million deal announced last week, Washington Construction will assume Morrison’s name and operate from its Boise headquarters. Morrison shareholders would get a package of five-year warrants to buy a combined 5 percent of the new company at $12 a share.
Kmart, unchanged at 10-1/8.
The nation’s No. 3 retailer lost $99 million, or 21 cents a share, in the first quarter, suffering large costs related to selling most of its stake in the Thrifty PayLess Holdings drug store chain. The quarter was the 13th consecutive with a loss or a decline in earnings, but the results for the three months ended May 1 were slightly better than expected. Kmart also announced it won’t sell the pharmacies in its stores.
Dayton Hudson, up 4 at 106.
The retailer’s first-quarter earnings quadrupled, helped by improved performance at its Mervyn’s chain and a strong showing by its Target chain.
NASDAQ
DCX, up 1 at 2 13-16.
The company announced a preliminary agreement to acquire Airtech International of Dallas for an undisclosed amount of stock. Airtech is a distributor of Honeywell air-purification systems for municipalities, hospitals and schools. DCX is a designer of cables that connect test equipment with avionics systems on military and commercial aircraft.
Republic Environmental Systems, up 10-1/4 at 20-1/4.
The stock surged for the second straight day after news that Alliance Holding will merge its Century Surety Group unit with to Republic in exchange for a 51 percent stake and options to buy 2.1 million more shares in the waste cleanup company.