Investors' holiday spirits were dampened a bit Wednesday as selling in retail and energy issues sapped the vigor out of a blue-chip sector that had run higher for eight consecutive sessions.
But the losses in larger issues obscured moderate rises in the shares of small- and medium-sized companies.
The Dow Jones Industrial Average declined 46.34 points, or 0.5 percent, to 9,274.64 to halt its eight-day streak.As usual, Internet-related shares grabbed the day's spotlight, wilting for the second day following a nine-day meteoric rise.
"A couple of the electronic commerce companies preannounced disappointing quarterly results today and that took the whole Internet group with it," said Arthur Hogan, chief market analyst at Jefferies & Co. Inc. "But that said, the group has been on fire and it's only natural to see some of the profits come back.
"The group is so one-directional that when it takes a direction it just goes there in a hurry."
"Institutional investors did the bulk of the selling in the Internet stocks," said Buzzy Geduld, president of Herzog Heine Geduld.
Among portals, America Online shed 6 11/16 to 147 15/16, Yahoo! 25 3/8 to 244 5/8, and Infoseek 4 9/16 to 49 15/16.
In e-commerce group, uBid caved 24 1/2, or 17 percent, to 119; SkyMall 13, or 32 percent, to 27 3/4; Digital River 4 1/16, or 10 percent, to 35; Creative Computers 9 5/8, or 20 percent, to 38; Cybershop International 2 3/8, or 16 percent, to 12 7/8; and Onsale 7 1/2, or 15 percent, to 44.
Web service providers, Rocky Mountain Internet fell 2 1/4 to 13 3/4 and Internet America surrendered 10 1/8 to 35.
Elsewhere in the technology sector, positive comments by Texas Instruments (TXN) pushed semiconductor shares forward. Speaking to Dow Jones Newswires, TI's Asian marketing chief said chip demand has risen in the fourth quarter and should continue in 1999's first quarter. TI stock climbed 3 1/2 to 87 1/2.
Advanced Micro Devices (AMD) gained 1 1/2 to 29 on comments by Wall Street analysts. Prudential Securities analyst Hans C. Mosesann upped his fourth-quarter per-share earnings estimate to 30 cents from 14 cents based on the shipment of 500,000 more K6-2 microprocessors than expected. Mosesmann termed the fourth-quarter demand for PCs as "robust." As well, analyst Erika Klauer of BT Alex. Brown lifted her fourth-quarter forecast for the semiconductor manufacturer to 19 cents a share from 15 cents. Klauer also repeated her "strong buy" rating and 12-month price target of $31 a share.
Other semiconductor issues rallied in sympathy with Texas Instruments and AMD. Altera added 4 1/16 to 59 1/8, Linear Technology 4 3/4 to 87 1/4, and Lattice Semiconductor 2 7/8 to 43 5/8.
The disk drive group, up more than double since the Oct. 8 market low, also stood in the black. Seagate Technology appreciated a full point to 30 7/16, Hutchinson Technology 1 3/16 to 35 7/8, and Storage Technology 2 3/16 to 34 1/4.
In Wednesday's market indicators:
- The Standard & Poor's 500 Index fell 0.8 percent. Fifty-two week highs totaled 131, while 52-week lows amounted to 58.
- New York Stock Exchange winners edged out losers by 8 to 7.
- On the Big Board floor, volume rose 1 percent to 593 million shares.
- The Nasdaq Composite declined 0.7 percent. Advancing issues led decliners by 21 to 19 in the Nasdaq Stock Market, with 140 new highs and 104 new lows. Volume totaled 909 million shares.
- The Russell 2000 Index of small-company stocks gained 0.4 percent.
- In the Treasury market, issues of all maturities climbed in an abbreviated session. The 30-year Treasury rose 6/32, to yield 5.088 percent.
Among companies in the news:
- Inktomi (INKT) put on 5 to 132. The company announced a two-for-one stock split effective on or about Jan. 27 to shareholders of record on Jan. 12. Inktomi develops and markets scalable software applications designed for use by Internet search engine and media concerns.
- Genesis Direct (GEND) rose 2 13/16, or 40 percent, to 9 7/8. The sports merchandiser joined the let's-announce-a-Web-site club with its announcement that it will hawk clothing and memorabilia through Excite's Internet portal.
- Navigant International (FLYR) was ahead 1/2 to 8 5/16 after being up as much as 2 5/16 points earlier. The supplier of corporate travel services confirmed that most of its operating companies have sites on the World Wide Web. It will open a centralized site at www.navigant.com in the first quarter of 1999.
- Track Data (TRAC) soared 3 7/8, or 102 percent, to 7 11/16 after announcing plans to provide its customers with online trading services. The company provides real-time financial market data to investors.
- Jabil Circuit (JBL) tacked on 2 7/8 to 73 3/4 after Goldman Sachs started coverage with a "market outperform" rating. Jabil supplies turnkey manufacturing services for circuit board assemblies and subsystems.
- Cost Plus (CPWM) lifted 2 5/8 to 32 1/8 on a Piper Jafray upgrade to "strong buy" from "buy."