Dow Slides on Profit Woes; Big Techs Rise

Blue-chip stocks swooned Thursday from Wednesday’s record highs in the face of profit warnings from some big-name companies.

But strength in major technology stocks pushed the Nasdaq composite index up slightly, to a record.

Meanwhile, the dollar rose sharply against the Japanese yen amid new speculation that China may be forced to devalue its currency if Asia’s economic crisis worsens. Doubts about Japan’s plan to spur economic revival also weighed on the yen.

On Wall Street, the Dow industrials slumped 85.19 points, or 0.9%, to 9,089.78, closing near the lows for the day.

The Standard & Poor’s 500 index dropped 0.7% to 1,158.56 after hitting a new high on Wednesday.

Blue chips were hurt by DuPont’s earnings warning, which sent that stock--one of the Dow 30 stocks--down $7 to $70.13.

Another Dow stock, Sears, was clipped $2.44 to $59.31 after reporting weaker-than-expected June sales. A report from J.C. Penney, one of Sears’ rivals, that current-quarter profit will be below expectations also weighed on Sears.

The continuing stream of poor earnings projections in recent weeks is reminding investors that “profit expansion is going to be much tougher than it was before,” said Bob Finch, a money manager at Aeltus Investment Management in Hartford, Conn. “It leads to a skittish market.”

But other analysts noted that stocks overall have held up well so far, despite earnings concerns. However, the actual reporting season only began this week, and investors have shown little mercy to individual firms that disappoint.

While blue chips fell Thursday, major tech stocks continued to attract money. That pushed the Nasdaq composite up 0.2% to a record 1,939.82.

In currency trading, the dollar jumped 1.83 yen to 141.10 in New York as traders speculated about China’s currency plans.

The dollar’s strength helped bolster the U.S. bond market, where yields were slightly lower.

Among Thursday’s highlights:

* Major retail stocks were mostly lower in the wake of June sales reports, even though many companies reported healthy numbers. On the downside, Penney sank $5.81 to $65.63, Dayton Hudson lost $1.38 to $49.94, Kmart fell $1.06 to $18.63 and Nordstrom dropped $1.75 to $37.50.

But Wal-Mart Stores added 31 cents to $63.13 and Ann Taylor jumped $1.75 to $23.06.

* Major tech stocks advancing included Intel, up $1.44 to $79.75; IBM, up $2.06 to $117.06; Compaq, up $1.75 to $31.56; and Dell Computer, up $3.50 to $99.88.

Also, Gateway rose $2.13 to $61.88 on talk the personal computer company might be a takeover target.

* The Internet sector, however, was broadly lower as profit-taking continued in those red-hot stocks. Internet search company Yahoo fell $2.19 to $184 after trading as high as $204. The company reported surprisingly strong earnings late Wednesday.

Other Internet-related stocks sliding included Excite, down $9.13 to $82.25; Lycos, down $6.56 to $70.94; and Doubleclick, down $4.31 to $51.81.

* The industrial sector suffered in the wake of DuPont’s announcement. Monsanto lost $1.06 to $53.88, Dow Chemical fell $1.63 to $95.56, Georgia-Pacific slid $2.31 to $56.88 and farm equipment maker Case fell $2.56 to $44.75.

But GE gained 81 cents to a record $94.13 after reporting strong earnings.

* Energy stocks continued to slide, with Exxon down $1.44 to $71.75, Chevron off $2.19 to $81 and Mobil down $1.38 to $75.13.

Market Roundup, D6

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