Closing Market Report

Star-Bulletin news services

Wednesday, June 23, 1999

Dow loses 54.7

NEW YORK - Blue-chip stocks fell for a third straight session today as persistent concerns about interest rates sent bond prices tumbling, but technology and small-cap stocks outperformed the Dow Jones industrial average. The Dow closed down 54.77 at 10,666.86 after falling nearly 105 points earlier in the session. The blue-chip index lost 94.35 yesterday.

The Standard & Poor's 500 fell 2.82 to 1,333.06, but the technology-dominated Nasdaq composite index rose 17.87 to 2,598.13.

Decliners beat advancers by a 7-to-5 margin on the New York Stock Exchange, with 1,746 down, 1,214 up and 576 unchanged. NYSE volume was 727.28 million shares, vs. 710.31 million yesterday.

The NYSE composite index fell 2.36 to 630.75, but the American Stock Exchange composite index rose 5.69 to 771.16. The Russell 2000 index of smaller companies dropped .29 to 447.04.

The stock and bond markets remained on edge as they awaited the Federal Reserve's meeting next week on interest rates. The Fed is widely expected to push rates higher in a bid to slow economic growth. Market players remain divided, however, on whether the Fed will raise rates more than once. Rates rose in the bond market in response to that uncertainty; today, the yield on the 30-year Treasury bond, which moves in the opposite direction to prices, rose to 6.11 percent from late yesterday's 6.06 percent.

Scott Bleier, chief investment strategist at Prime Charter Ltd., said that while many traders are beginning to accept the possibility of two rate increases, some fear the Fed will raise rates three times, wiping out the rate cuts that the central bank initiated last fall.

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