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Dow Falls 61.28 to 9,128.91

July 22, 1998

NEW YORK (AP) _ Stocks fell sharply again today as the improving profit outlook of recent weeks grew more suspect with disappointing news from Disney and Hewlett-Packard.

The Dow Jones industrial average fell 61 points to about 9,128 after halving a midday deficit of 115 points.

It was the third straight losing session for the blue-chip barometer, which has now fallen 209 points from Friday’s record close of 9,337.97.

Broad-market indicators also staged a partially recovery this afternoon, with the Standard & Poor’s 500 even bobbing into positive terrain before finishing with a modest loss.

Hewlett-Packard, which warned late Tuesday that it won’t meet Wall Street expectations for its current quarter, fell sharply as one of the Dow’s bigger decliners.

Merck led the Dow’s slide for a second day after plunging nearly 10 points on Tuesday, when the drugmaker posted slightly weak second-quarter results and issued a discouraging outlook for the remainder of 1998.

Disney, another Dow component, suffered only a marginal loss after coming in shy of analyst forecasts with late Tuesday’s report on second-quarter profits.

The disappointing news from big names like Merck and Hewlett-Packard has aggravated lingering worries about the impact of the fiscal crisis in Asia and an apparent slowdown in the domestic economy.

Compounding matters, any hopes for an economy-boosting cut in interest rates by the Federal Reserve were dashed by this week’s congressional testimony by central bank chairman Alan Greenspan.

Greenspan, who visited Congress today and Tuesday to deliver a midyear update, said the most likely outcome of the fallout from Asia is a welcome slowdown that will keep inflation in check and prolong the current economic expansion.

Overseas, Tokyo’s Nikkei stock average fell 1.6 percent, Frankfurt’s DAX index fell 1.5 percent and London’s FT-SE 100 fell 2.3 percent.

According to preliminary calculations, the Dow Jones industrial average fell 61.28 to 9,128.91.

The Standard & Poor’s 500 fell 0.99 to 1,164.08, and the technology-heavy Nasdaq composite index fell 9.39 to 1,969.75.

Declining issues outnumbered advancers by nearly a 2-to-1 margin on the New York Stock Exchange, with 1,043 up, 1,920 down and 569 unchanged.

NYSE volume totaled 736.48 million shares as of 4 p.m., up from 658.76 million on Tuesday.

The NYSE composite index fell 1.86 to 588.81, and the American Stock Exchange composite index fell 0.93 to 733.03.

The Russell 2000 index of smaller companies fell 5.21 to 450.93.

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