Stocks Resume Slide; Dow Tumbles 127 Points

Stocks veered off the road to recovery Thursday as the Dow Jones industrial average extended a streak of unprecedented volatility, sliding 127 points for its fifth straight triple-digit swing.

The Dow was down nearly 175 points just 15 minutes before the close, but quickly regained about 50 points to finish at 7,893.95, down 127.28. The drop snapped a three-day streak of 100-point gains that briefly erased last Friday’s 247-point slide.

“We’ve had 300 points of upside surge in three days, and frankly I thought that was about as meaningful as Friday’s 250-point decline,” said Charles G. Crane, director of research at Spears, Benzak, Salomon & Farrell. “This is a volatile market, and we’re going to get a lot of these days which are so much sound and fury, but signify little.”

Broad-market indicators, many of which had already surged about 4 percent this week, also retreated sharply.

“This market is dominated by short-term traders bouncing off one another, frantically running to buy or sell to catch a point,” said Michael Metz, chief investment strategist at Oppenheimer & Co.

Declining issues outnumbered advancers by more than a 2-to-1 margin on the New York Stock Exchange, where volume totaled 497.57 million shares as of 4 p.m., down slightly from Wednesday’s busy pace.

Some of the stocks that moved substantially or traded heavily Thursday:

NYSE

Wells Fargo & Co., down 13 at 254-1/2.

Inaccurate reports circulated that Warren Buffett’s investment company, Berkshire Hathaway, had liquidated its stake in the bank. The reports were prompted by routine filing with the Securities and Exchange Commission.

SmithKline Beecham, down 3-9/16 at 88-7/16.

A group of 37 health insurers sued SmithKline Beecham, accusing the London-based company’s clinical laboratory division of overbilling them by hundreds of millions of dollars.

Morgan Keegan, up 2-3/8 at 25-3/4.

The Memphis-based investment firm declared a 3-for-2 stock split and increased its common stock dividend by 12.5 percent.

NASDAQ

MCI Communications, down 6-1/8 at 30-9/16.

British Telecommunications is reviewing whether it’s paying too much to buy MCI, raising doubts about the $22 billion deal.

Sunglass Hut International, down 1-3/8 at 8-1/16.

The eyewear retailer reported second-quarter profits that were slightly below many Wall Street forecasts.

Guildford Pharmaceuticals, up 3-5/8 at 28-7/8.

The Baltimore-based drug company sold Amgen worldwide rights to a class of neurotrophic agents being developed to promote nerve regeneration and repair.