Closing Market Report

Associated Press

Thursday, March 20, 1997

Dow off 57
on Fed, tobacco

NEW YORK -- Stocks moved mostly lower today after Federal Reserve chairman Alan Greenspan again raised the possibility of a pre-emptive interest rate hike to combat inflationary pressures.

The Dow Jones industrial average fell 57.40 to 6,820.28.

Decliners outnumbered advancers by nearly a 5-to-3 margin on the New York Stock Exchange, with 952 up, 1,562 down and 799 unchanged. NYSE volume totaled 496.86 million shares vs. 535.56 million yesterday.

The Standard & Poor's 500-stock list fell 3.12 to 782.65, and the NYSE's composite index fell 1.81 to 411.78. The Nasdaq composite index rose 9.97 to 1,259.26, and the American Stock Exchange composite index fell 0.24 to 591.55.

The battered technology sector attracted bargain hunters and snapped a seven-session losing streak.

But the Dow fell for the third straight session. A big chunk of the blue-chip barometer's loss came from Philip Morris, which sank the equivalent of about 22 Dow points amid news that a rival cigarette maker agreed to settle with 22 states suing the tobacco industry.

Bonds initially fell after a morning appearance by Alan Greenspan before the congressional Joint Economic Committee, where he repeated warnings that Fed policymakers must be vigilant about containing inflation.

The Fed's policy makers meet Tuesday to decide whether to temper the economy by slowing borrowing and spending with higher interest rates.

As bond prices fell in the morning, the yield on the 30-year Treasury bond rose as high as 7.02 percent, up from late yesterday's 6.98 percent. As bonds recovered, the yield edged down to 6.95 percent.

The long-bond yield hasn't finished a day above 7 percent since September.

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