Dow Pads Tuesday Gain, But Fades Near Close

Economy

Stocks rose only marginally Wednesday, fading into the close of a ho-hum sequel to Tuesday’s dramatic rally, which propelled blue-chip indicators to their biggest point-gains ever.

The Dow Jones industrial average, which rose a record 257 points on Tuesday, added just 14.86 to 7,894.64, surrendering most of an earlier 65-point gain after the release of some robust auto sales data that stoked the market’s nagging inflation fears.

Broad-market indicators also posted slim gains, but it was enough to give the Russell 2000 index of smaller-company stocks its fifth consecutive record high.

Stocks were rising steadily Wednesday afternoon until the bond market sagged, boosting interest rates, after General Motors and Chrysler reported stronger-than-expected August sales.

“It snapped a string of poor months in terms of retail auto activity, which is a good proxy for consumer spending,” said Ned Riley, chief investment officer at the Bank of Boston, noting that the numbers may have been bolstered by rebates and other sales incentives.

Advancing issues outnumbered decliners by a 3-to-2 margin on the New York Stock Exchange, where volume totaled 548.72 million shares as of 4 p.m., the heftiest tally in three weeks.

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

NYSE

Gateway 2000, down 3-3/4 at 32-13/16.

The direct seller of personal computers warned that its third-quarter earnings would fail to meet analyst forecasts. Gateway cited its own “overly aggressive” forecasts, the strike at United Parcel Service, and lower average unit prices.

Seagate Technology, down 2-1/2 at 36-3/8.

Salomon Brothers downgraded its rating on the maker of computer disk drives from “buy” to “hold.”

Carmike Cinemas, down 3-1/2 at 27-3/4.

The movie theater operator warned that its earnings for the third quarter ending Sept. 30 won’t meet analyst estimates.

Pall, down 1-1/2 at 22-1/2.

The maker of filters and other fluid processing devices reported disappointing results for its fourth quarter ended Aug. 2.

NASDAQ

Biospherics, up 8 at 12-1/8.

Wm. Wrigley Jr. Co. filed for U.S. and international patents to use Biospherics’ tagatose nonfattening sugar in chewing gum.

Cylink, up 2-9/16 at 13-13/16.

The company’s information security software will be used by Sun Microsystems and Microsoft. Sun will use Cylink technology in the new development kit for the Java. Microsoft will use Cylink technology for Internet Explorer 4.0 and Windows NT 5.0.