clarinews@clarinet.com (JANICE KIRKEL, UPI Business Writer) (01/18/90)
NEW YORK (UPI) -- The stock market closed sharply lower Wednesday in active trading, battered by late waves of computerized program selling and earnings disappointments from Alcoa and International Business Machines Corp. The Dow Jones industrial average, which rose 23.25 Tuesday, tumbled 33.49 to 2659.13. Among broader market gauges, the New York Stock Exchange composite index fell 1.51 to 186.86 and Standard & Poor's 500-stock index lost 3.35 to 337.40. The price of an average share dropped 29 cents. Declines led advances 866-636 among the 1,967 issues crossing the NYSE tape. Big Board volume totaled 170,470,000 shares, compared with 186,070,000 shares traded Tuesday. Analysts blamed the sharp drop on several bouts of computerized program selling in the last hour of trading. The technique is used to profit on brief price differences between stocks and stock index futures. ``The market has again been captured by them,'' said Gene Seagle, technical research director at Gruntal and Co., of the computer programs which dictate selling. Analysts said news that Alcoa's quarterly earnings were sharply lower, and below expectations, started the market off on its afternoon decline and returned Wall Street's focus to fourth-quarter earnings reports. The stock is not only a component of the Dow industrials but of other major market indexes. Prices fell in early trading after a disappointing earnings report from International Business Machines Corp., which showed profits below analysts' already-lowered expectations. The bellwether Dow component reported earnings fell to $1.04 a share from $3.97 a year earlier, but the 1989 quarter included a $2.4 billion restructuring charge. Some midday bargain hunting pushed the blue chips into the plus column, though, before prices declined again. Dennis Jarrett, chief market strategist at Kidder, Peabody and Co., noted that the blue chips fared far worse than the broad market. ``There were not morethan 1,000 declines so (the broad market) was not hit nearly as bad as the Dow,'' he said. ``There's also a lot of apathy in the market. No one wants to be too adventuresome with bargain hunting,'' said Jarrett, referring to the Dow's brief trip into positive territory before the upward momentum fizzled and prices turned lower again. On the trading floor, Aristech Chemical was the most active NYSE issue, up 1/2 to 25 1/8. Reports late Tuesday said Huntsman Holdings, which owns about 8.7 percent of the company, was evaluating the $26-a-share management buyout offer. Huntsman had proposed a $25-a-share deal. Citicorp followed, up 3/8 to 26 3/8. Varity was third, up 1/8 to 3. Among the other blue chips, Alcoa plunged 5 7/8 to 66 7/8, AT&T fell 5/8 to 42 1/2, IBM tumbled 1 1/4 to 98 7/8, Primerica rose 3/4 to 28 1/2 after reporting fourth-quarter earnings of 87 cents a share, at the high end of expectations, but Westinghouse lost 1 to 71 3/4 despite reporting a gain in quarterly profits. Also on the earnings front, Caterpillar tumbled 2 1/8 to 54 7/8. Reports said the company's earnings, expected out Thursday, would be down sharply. Other aluminum stocks fell along with Alcoa. Reynolds Metals sank 1 7/8 to 52 3/8 and Alcan Aluminium tumbled 1 1/8 to 21 1/4. Technology issues, which rallied Tuesday, followed IBM down. Digital lost 1 1/4 to 87 7/8, Compaq fell 1 1/4 to 82 5/8, NCR was down 1/2 to 63 1/4, and Hewlett-Packard slumped 7/8 to 45 3/4. Volume of NYSE-listed issues, including trades in stocks on regional exchanges and in the over-the-counter market, totaled 202,032,740 shares, compared with 217,797,910 shares traded in the previous session. Prices closed slightly lower in active trading on the American Stock Exchange. The Amex Market Value index fell 0.35 to close at 368.06. The price of an average share lost 1 cent. Declines led advances 282-258 among the 807 issues traded. Composite volume totaled 18,554,800 shares, compared with 17,873,000 traded Tuesday. Salomon ``put'' warrants on the Nikkei index, which effectively function as bets that the Tokyo stock market will fall, led the Amex issues, closing at 4 1/4 on their first trading day. The National Association of Securities Dealers composite index fell 1.48 to 438.68.