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Dow Slumps As Tech Rally Fizzles

Blue-chip stocks gave back some of their gains from earlier this week, closing slightly lower in an uneventful session Wednesday.

The market spent most of the day confined to a narrow trading range, after a blow-out earnings report from technology bellwether Dell Computer failed to fuel a lasting rally in the morning session.

The Dow Jones Industrial Average declined 21.37 points, or 0.2 percent, to 8,693.28. The barometer hit its session high in the first 15 minutes of the day, moving up as much as 39.13 points.

"We're still very positive on the Dow," said Laszlo Birinyi Jr., president of Birinyi Associates. "We continue to see net buying in the market just as we saw during the decline."

Beneath the surface of the popular averages, sobering news on the profits front from a pair of semiconductor makers sapped the strength from the technology sector. Transportation stocks were the day's big loser, driving lower after the airline industry's 4 percent fare increase of Tuesday fell apart.

Thus far this week, the Dow has risen about 3.5 percent. The gains have occurred as investors reacted positively to President Clinton's admission that he conducted an inappropriate relationship with Monica Lewinsky.

Overseas, stocks gained in sympathy with Tuesday's Wall Street advance.

Hong Kong's Hang Seng index shot up 5.7 percent as the government bought shares to bolster the market.

And Japan's benchmark Nikkei 225 index climbed 2.3 percent to close at 15,406.34.

But Russia, which devalued its ruble over the weekend, saw its benchmark RTS1-Interfax index absorb a 9.4 percent drubbing amid worries over the government's plan to restructure $46 billion in Treasury bills it has defaulted on. The plan is expected to be unveiled Monday.

In Wednesday's market highlights:

  • The Standard & Poor's 500 Index fell 0.3 percent.
  • New York Stock Exchange losers topped winners by 3 to 2. Twenty-seven stocks hit new 52-week highs and 161 scraped new 52-week lows.
  • On the Big Board floor, turnover dwindled 8 percent to 635 million shares.
  • The Nasdaq Composite declined 0.7 percent. Declining issues led advancers by 3 to 2 in the Nasdaq Stock Market. Volume totaled 731 million shares.
  • The Russell 2000 Index of small-capitalization stocks sank 1.3 percent.
  • The 30-year Treasury was unchanged, to yield 5.563 percent.