Interest Rates Hit Record Low, But Stocks Falter

A key interest rate reached an all-time low, but stocks managed only scattered gains Monday as lingering profit worries undermined a run to record levels.

The Dow Jones industrial average recovered from a 52-point loss to close 13.95 higher at 7,978.99, but only after surrendering a 70-point gain that had put it above 8,000 for the first time in nearly a month.

Broad-market indicators also struggled, although the technology group managed some sizable gains despite a profit warning from Internet software maker Netscape Communications.

As the yield on the 30-year Treasury bond plunged to 5.73 percent in the morning, the Standard & Poor’s 500 and the New York Stock Exchange composite index flirted with new highs. But the indexes suddenly pulled back with the Dow around midday.

The long-term bond yield, a benchmark used to determine the interest rate charged on mortgages and many other loans, had never finished a day below 5.79 percent, a record set back in 1993.

Analysts said stock investors would likely remain cautious until they finally get some concrete answers over the next few weeks about how much the Asian economic crisis hurt company profits in the final three months of 1997.

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

NYSE

Southern New England Telecommunications, up 10-7/8 at 60-1/2.

SBC Communications agreed to acquire SNET for stock valued at nearly $66 a share, or $4.4 billion, giving the Southwestern telephone giant a foothold in a region dominated by Bell Atlantic. Each share of New Haven, Conn.-based SNET is to be swapped for 0.8784 share of San Antonio-based SBC.

ConAgra, down 2-3/8 at 30-13/16.

Goldman Sachs removed the food giant from its recommended list, Dow Jones News Service reported, citing a contact at the investment firm. Goldman Sachs analyst Nomi Ghez downgraded Omaha, Neb.-based ConAgra to “market perform.”

NASDAQ

Netscape Communications, down 4-13/16 at 18-9/16.

The maker of Internet browsing software warned that it will post an unexpected loss for the fourth quarter due to weak revenues from Europe and Asia. Netscape, based in Mountain View, Calif., said it will cut jobs and close some facilities to help return to profitability.

ETrade Group, up 2-3/8 at 25-5/16.

The online brokerage reported a profit of $4.9 million for the last three months of 1997, more than double its results from the same period in 1996 and slightly better than analysts expectations. ETrade is based in Palo Alto, Calif.