Closing Market Report

Star-Bulletin news services

Wednesday, August 4, 1999

Dow slips 2.54

Associated Press

NEW YORK - Blue-chip stocks collapsed in the final half-hour of trading today, deflating a rally fueled by the news of a $9.3 billion merger of Dow Chemical and Union Carbide. The broader market, plagued by fears of inflation, declined much more steeply.

The Dow Jones industrial average fell 2.54 to close at 10,674.77. The Dow, following what is becoming a familiar pattern, gave up nearly all its gains late in the day and wiped out what had been a 152-point gain. The Standard & Poor's 500 fell 16.85 to 1,305.33, and the Nasdaq composite index fell 47.99 to 2,540.00.

Decliners beat advancers by a nearly 2-to-1 margin on the New York Stock Exchange, with 1,961 down, 1,006 up and 534 unchanged. NYSE volume totaled 788.50 million shares vs. 735 million shares yesterday. The NYSE composite fell 7.94 to 614.46; the American Stock Exchange composite fell 3.52 to 776.95; and the Russell 2000 index fell 6.58 to 429.70.

Bond prices, which have tumbled amid the growing belief that the Federal Reserve will raise interest rates, recovered today as the Treasury Department said it would reduce bond sales and proposed a buyback of the $3.6 trillion national debt.

The yield on the benchmark 30-year Treasury bond fell to 6.11 percent from 6.16 percent late Tuesday. But analysts say the yield remains high enough to lure some investors away from stocks.

Stocks were expected to stay in a fairly narrow range through Friday, when the Labor Department releases its monthly unemployment report. The report is expected to offer the latest indication of whether wage pressures are escalating inflation.

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