NEW YORK - Stocks fell sharply today as a mostly encouraging stream of fourth-quarter profit reports was overshadowed by a weak IBM forecast citing the continuing economic crisis in Asia. Dow drops 78 on Asian worries
The Dow Jones industrial average fell 78.72 points to close at 7,794.40, a partial recovery from a 135-point slide that briefly wiped out yesterday's 119-point rally.
Decliners led advancers by a 11-to-7 margin on the New York Stock Exchange, with 1,130 up, 1,787 down and 527 unchanged. NYSE volume was 625.07 million shares vs. 638.92 million yesterday.
Broad-market indicators also surrendered a chunk of yesterday's gains, which put several indexes in back positive territory for 1998 for the first time since Jan. 2.
The Standard & Poor's 500-stock list fell 7.82 to 970.78, and the NYSE composite index lost 4.02 to 507.90. The Nasdaq composite index fell 2.22 to 1,587.92, and the American Stock Exchange composite index dropped 3.93 to 669.44. The Russell 2000 index of smaller companies fell 1.42 to 429.89.
The price of the Treasury's main 30-year bond was up 19/32 point, or $5.94 per $1,000 in face value, by late afternoon, while its yield fell to 5.80 percent from 5.84 percent late yesterday. Prices and yields move in opposite directions.
Today's heavy stock losses came despite some better-than-expected fourth-quarter profit reports from Dow components Caterpillar and Exxon, as well as Compaq Computer and Delta Air Lines.
Those reports did little to distract attention from late yesterday's news that IBM posted disappointing fourth-quarter profits and warned that the current quarter's results are being hurt by slack consumer demand in Asia.
Surprisingly, although IBM tumbled the equivalent of more than 30 Dow points, the technology sector suffered only a marginal loss. The technology-heavy Nasdaq composite index fell only a little bit more than a tenth of a percent.
Asian markets turned mixed today after posting a sizable rebound over the past week.
In an unsettling development, the Indonesian currency hit another record low after President Suharto chose a long-time ally as his running mate, spurring worries that continued cronyism will impede economic reform.
The Nikkei stock index in Tokyo rose 1.9 percent for its sixth straight gain. The Nikkei has gained 13.8 percent over that span, up from the 21/2-year low on Jan. 12.
In Europe, Frankfurt's DAX index fell 0.6 percent and London's FT-SE 100 fell 0.1 percent.