Blue-chip stock prices declined Thursday after three days of setting record highs. Investor interest in Nasdaq technology and health-care stocks remained upbeat.
The Dow Jones industrial average dropped 21.34 points to 3457.00 in moderately active trading on the New York Stock Exchange. The broader Standard & Poor’s 500 index fell 2.61 points to 453.72.
Bond yields edged up in advance of Friday’s report on producer prices. Traders are looking for about a 0.3 percent gain in the February number.
A number much higher than that would awaken inflation fears that lie just beneath the surface of the bond market.
Auto, paper and other basic-industry stocks sold off Thursday. One reason was an unexpectedly bearish report on first-time claims for unemployment compensation.
General Motors fell $1.37, to $38.75, in active trading. After weeks of rumors, the company announced that its highly touted purchasing chief, J. Ignacio Lopez de Arriortua, had resigned. GM suppliers, who had grown to detest Lopez’s business practices, will be cheered by the news.
Pharmaceutical stocks, which rebounded earlier in the week, gave ground Thursday. Glaxo Holdings was the most active Big Board stock, closing off 87 cents at $19 on more than 6 million shares traded. Its chief executive officer resigned amid rumors of tough negotiations between the company and the Food and Drug Administration, which has accused Glaxo of making misleading claims for its Zantac ulcer drug. Merck and Bristol-Myers also fell in active trading.
Bucking the downward move among cyclical stocks was the steel group, which posted gains after upbeat comments by an analyst at Merrill Lynch. Inland Steel rose 12 cents, to $22.87.
Local news
– Wisconsin-based Lands’ End, a catalog clothing retailer, rose $2, to $27.37, in active trading after the company reported better-then-expected fourth-quarter net income of $1.18 a share, up from $1.10 a year earlier. Analysts had been looking for $1.12. The company said the latest results “weren’t as strong as we had hoped, due to disappointing sales from our November catalog.” But December and January sales were 14 percent above year-earlier levels.
– Chicago-based Fruit of the Loom rose 87 cents, to $46, on the American Stock Exchange after Moody’s Investors Service said it was reviewing the company’s rating for a possible upgrade on $416 million of long-term debt. Moody’s said it was impressed by the wider ownership of the company’s stock, an increase in outside directors on the board and improvement in financial protections for debt holders.
– Nut marketer John B. Sanfilippo & Son, Elk Grove Village, plans to offer up to 2.4 million additional shares, giving it 8.75 million shares outstanding. Two million of the shares are to be offered by the company and 400,000 by insiders. Proceeds to the company will be used to pay down debt, complete the acquisition of Crane Walnut Orchard and allow for expansion.
– Electrical construction company L.E. Myers rose 87 cents, to $15.12, after the company disclosed that the Tennessee Valley Authority had awarded it a contract for specialized transmission line construction and maintenance. The contract could bring the company $20 million in the next two years.
– Bally Manufacturing climbed 25 cents, to $7, after the company disclosed it had completed a private debt refinancing on its Bally’s Grand Casino in Atlantic City. The move will reduce the interest rate to 10 5/8 percent from 13 1/4 percent for $275 million in debt. Bally said it was taking advantage of the strong bond market.
– Chicago-based investment firm Duff & Phelps dropped 12 cents, to $17.75, after its largest shareholder, Freeman Spogli & Co., offered to the public 2.7 million shares at $17.75 each following a 3-for-2 stock split by Duff & Phelps. Duff & Phelps at the same time bought back from Freeman Spogli 1.5 million additional shares. These moves will leave Duff & Phelps with 16.6 million shares outstanding, with Freeman Spogli owning 24 percent of that amount.
