Profit-Taking Snaps Dow’s Sudden Surge

Blue-chip stocks pulled back Wednesday, but broader measures extended a record-setting rally as investors again used an early spurt of profit-taking as an opportunity to buy into a suddenly welcoming market.

The Dow Jones industrial average fell 30.64 to 8,129.71, but still sits just 130 points shy of its Aug. 6 record close of 8,259.31.

Technology shares led the turnaround in the broad market, bolstered by some healthy profit reports from Cisco Systems, the bellwether of the computer networking sector, and Peoplesoft, a leading business software company.

Smaller-company issues, which have lagged the recent rally, outperformed the blue-chip sector. Still, the big-company dominated Standard & Poor’s 500 managed to turn higher by the close to set its third straight record high.

“There’s lot of money coming in on dips,” said Thom Brown, market strategist for Rutherford, Brown & Catherwood of Philadelphia, noting that the market could have seen some heavier selling after Monday’s 201-point gain by the Dow.

“When you get a real surge like we had on Monday, and then you have a market which tries to get into profit-taking mode and ends up on the plus side, that’s a pretty healthy outlook,” said Brown.

Advancing issues outnumbered decliners by a 5-to-4 margin on the New York Stock Exchange, where volume totaled 701.74 million shares, the fifth time in six sessions that more than 700 million shares have changed hands.

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

NYSE

Hecla Mining, up 1-1/16 at 5-7/8.

Sunshine Mining, up 7/16 at 1-9/16.

Coeur D’Alene Mines, up 1-15/16 at 10-13/16.

Mining stocks rose after late Tuesday’s reports that Warren Buffett’s Berkshire Hathaway has loaded up on nearly 130 million ounces of silver since July.

Consolidated Stores, down 4-5/8 at 39-7/8.

The retailer of toys and close-out merchandise cautioned that it expects to report disappointing results for its fiscal year ended Jan. 31 due to a December sales shortfall.

NASDAQ

Cisco Systems, up 1-9/16 at 64-9/16.

The leading manufacturer of computer networking equipment reported a 30 percent increase for its second quarter ended Jan. 24, edging analyst expectations.

PeopleSoft, up 1-7/8 at 39-7/8.

The maker of business software beat forecasts with its fourth-quarter profit report late Tuesday. Peoplesoft also said it expects its 1998 revenues to be between 50 percent and 60 percent above 1997 levels.

Raster Graphics, down 1-59/64 at 2-37/64.

The maker of color printing systems warned late Tuesday that it will report an unexpected loss for the fourth quarter.