Asian Economic Crisis Still Worries Markets

Stocks fell along a broad front Wednesday, led by technology and banking shares, as Asia’s economic crisis continued to endanger profits at U.S. multinational corporations.

The Dow Jones industrial average, at one point down more than 127 points, finished the day off 70.87 at 7,978.79. It was the first close below 8,000 this month.

Broad market indexes were lower as well.

“We’re starting to see a clearer picture of the… fallout from the currency crisis in Asia,” said First Albany Corp.’s market strategist, Hugh Johnson. “Investors were generally worried that the crisis would affect the U.S. economy and earnings, and now that concern is focused on individual companies.”

Concern about U.S. vulnerability to problems in Asia is rising at an inconvenient time for stock investors, because valuations on Wall Street already are very high, said Larry Wachtel, a market strategist at Prudential Securities.

“We were in a market that demanded perfection,” Wachtel said. With the Standard & Poor’s 500 components fetching a very rich 20 times projected 1998 earnings - the ‘E’ in the P/E ratio of prices to earnings - “there can’t be any problem with the E,” Wachtel said. “All of the sudden, the E is under a cloud.”

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

NYSE

J.P. Morgan fell 5 to 117-7/8.

The bank raised its quarterly dividend to 95 cents per share from 88 cents, but said troubles in world markets would hurt its fourth quarter results by lowering trading volumes and dampening client activity.

Compaq Computer fell 3-3/8 to 60.

Donaldson Lufkin & Jenrette Securities Corp. downgraded the stock to buy from recommended list buy. No further details were available, and a call to DLJ was not immediately returned.

NASDAQ

Oxford Health Plans fell 2 15/16 to 17-1/8.

Late Tuesday the company said it will report a net loss for the fourth quarter and year. The health-maintenance organization is increasing its medical-claim reserves for its New York subsidiaries by $164 million, which along with other costs will result in the loss.

Oracle rose 1/2 to 23 7/16.

After dropping almost 30 percent Tuesday on news of a disappointing profit report, Oracle managed to rise Wednesday.

AMEX

Hasbro rose 2 7/16 to 33 11/16.

On Tuesday the toymaker announced it would eliminate 20 percent of its work force and buy back up to $500 million worth of its own stock.