Profit Takers Hit Intel, Leading Stocks Lower

Stocks gave up ground Wednesday as technology bellwether Intel sold off despite its stellar quarterly earnings report.

Meanwhile, the dollar had a seesaw day, hitting its highest level in years against the Japanese yen and German mark before closing lower. In the gold market, prices continued to edge down.

On Wall Street, the Dow Jones industrial average ended 35.41 points lower at 6,726.88, snapping a four-session streak of record closes.

The Nasdaq composite index was off 12.83 points at 1,333.53, or nearly 1%, as many tech issues pulled back with Intel.

The semiconductor giant’s shares slumped 5 1/8 to 142 even though the company late Tuesday reported fourth-quarter earnings far above analysts’ expectations.

Some traders said investors were reacting to Intel’s warning that first-quarter revenue will be flat with the fourth quarter and that profit margins may be under pressure temporarily.

But others said profit taking in the stock, even on good news, is hardly surprising, considering that Intel shares zoomed 131% in 1996.

In the broad market Wednesday, losers edged winners on the Big Board and on Nasdaq in continued heavy trading.

Bonds, meanwhile, were relatively calm, though rates edged up. The 30-year Treasury bond yield rose to 6.79% from 6.76% on Tuesday.

In currency markets, the dollar hit a 46-month high against the yen of 117.47 before dropping to 116.82, off from Tuesday’s close of 116.93. It also climbed to a 30-month high versus the mark of 1.60 before slipping to 1.588.

“The dollar is pausing for a day or so” before going higher, said David Ogg, manager of foreign exchange at Dresdner Bank. “Economic weakness in Germany and Japan compared with the U.S. makes our markets more attractive to invest in,” driving the dollar up as foreigners buy dollars with which to make U.S. investments.

Elsewhere, the dollar’s appeal and lessened inflation worries drove gold to a fresh 3 1/4-year low, with near-term futures off $1.50 at $352.20 an ounce in New York.

Crude oil prices, in contrast, soared again on speculation that Russian President Boris Yeltsin’s health is worsening, resurrecting the specter of political upheaval in one of the world’s biggest oil-producing countries.

Near-term oil futures rose 84 cents to $25.95 a barrel.

Among Wednesday’s highlights:

* Tech stocks falling with Intel included IBM, down 2 25/64 to 164%; Compaq, down 2 1/2 to 77; Cabletron Systems, off 1 3/4 to 34 5/8; Seagate, down 2 1/8 to 47; and Oracle, off 2 to 41 1/4.

On the plus side, Yahoo surged 4 1/2 to 25 3/8 after reporting stronger-than-expected quarterly earnings. And chip maker Advanced Micro Devices also continued to climb, adding 1 1/8 to 33 5/8.

* Among other stocks reacting to earnings reports, BankAmerica leaped 5 5/8 to 107 3/8 after reporting healthy results. Also gaining on earnings news were Global Marine, up 7/8 to 24 1/4, and H.F. Ahmanson, up 3/8 to 34 1/8.

* Some consumer issues in the Dow slumped. Philip Morris fell 1 7/8 to 113 3/4 and Merck lost 3/4 to 83 1/4. But Coca-Cola hit a record high, up 1 1/2 to 57.

* Airline issues showed strength. UAL, parent of United Airlines, rose 1 5/8 to 58; Delta surged 3 1/4 to 75 1/4; and USAir was up 7/8 to 23 5/8. The group was helped by Delta’s announcement that its costs in the current quarter will be lower than expected.

* Baby Bell stocks also were broadly higher, with SBC Communications up 1 3/8 to 52 3/8, BellSouth up 1 3/4 to 42 1/4 and Bell Atlantic up 1 5/8 to 68 1/8.

* The Dow utility index edged up, gaining 0.21 point to 237.98. Rising utility stocks suggest investors expect lower interest rates ahead. Edison International, parent of Southern California Edison, inched up 1/8 to 20 5/8 after hitting a 52-week high of 20 3/4.

In foreign trading, the Mexican Bolsa stock index rocketed 2.7% to a record 3,728.02 on news that Mexico is repaying a U.S. loan early.

Market Roundup, D6