Stocks Jump, Retreat On Rate News
A Federal Reserve decision not to raise interest rates provided a brief sigh of relief on Wall Street, but a still-uncertain outlook for corporate profits pulled stocks lower Tuesday, preventing another run to record highs.
The Dow Jones industrial average fell 20.71 points to 5,874.03, surrendering a sudden 50-point gain that followed the central bank’s announcement shortly after 2 p.m. But most of the Dow’s decline came on a big drop in AT&T shares after the company warned of disappointing profits for the second half of 1996.
Most broad-market indexes also finished lower, gyrating several times before the close. Analysts said investors, concerned about pricey conditions after this month’s recordsetting advance, used Tuesday afternoon’s rally to secure some profits.
Some of the stocks that moves substantially or traded heavily Tuesday:
NYSE
AT&T, down 5-5/8 at 51-1/2.
The company warned that profits in the second half of 1996 likely will be as much as 10 percent below expectations. AT&T cited intense competitive pressures, particularly in consumer long-distance operations, and said it would fight back with a new simplified pricing plan designed to lure consumers confused by more complex alternatives.
Micron Technology, up 4 at 31-1/2.
Texas Instruments, up 5-5/8 at 57-3/8.
LSI Logic, up 1-1/4 at 24-3/4.
National Semiconductor, up 1-5/8 at 20-5/8.
Intel (Nasdaq), up 3/4 at 96-1/2.
Morgan Stanley and Hambrecht & Quist reportedly upgraded their assessments of the semiconductor industry.
NASDAQ
United Air Specialists, up 2-1/4 at 6-3/4.
Clarcor, a maker of filtration and packaging products, agreed to acquire United Air Specialists for about $26.3 million, or $8 a share, in stock. Cincinnati-based United Air Specialists makes commercial and industrial air cleaners and filters.
AMEX
Pan Am, up to 16-1/8 from pre-merger price of 14-3/4.
The new Pan Am completed its merger with a Florida investment company and began trading its stock. Based in Miami, the airline purchased the Pan Am trademarks from the former company that folded in 1991 after the 1988 bombing of Flight 103 over Lockerbie, Scotland. The new Pan Am began accepting reservations last week for its first scheduled flights Thursday.