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Blue-chip stocks

drift lower

NEW YORK: Blue-chip stocks drifted lower Thursday as the hoopla surrounding the launch of Microsoft Corp.'s Windows 95 operating system failed to inspire a rally in technology shares.

The Dow Jones industrial average ended 4.23 points lower at 4,580.62. In the broader market, declining issues led advances 1,108 to 1,077 in moderate trading of 299 million shares on the New York Stock Exchange.

The continuing correction in technology stocks, paced by International Business Machines Corp. and Microsoft, left traders jittery in a thin summer market, analysts said.

"People are nervous, like a horse in the middle of fly season," said Ned Collins, head of U.S. equity trading at Daiwa Securities America Inc.

Dow index component IBM shed 1-3/4 to 104-7/8.

Microsoft lost 1-3/4 to 96-1/8. It opened higher on the day of its ballyhooed Windows 95 launch but fell after the Justice Department said its probe of Microsoft is continuing.

"Wouldn't you know someone from the government would put a damper on the Windows 95 party," one analyst said. "If Microsoft continues to grow and dominate the server market and controls every key architectural standard, the government will step in."

The technology-laden Nasdaq composite index shed 7.26 points to 1,020.93.

Analysts said the bond market reacted to data that showed the economy may be slowing.

In the bond market, the the benchmark 30-year Treasury bond soared 1-7/32, or $12.1875 on a $1,000 bond, sending its yield down to 6.82 percent from 6.91 percent on Wednesday.

The Commerce Department reported that orders for expensive manufactured goods tumbled 1.7 percent in July -- far worse than the performance expected by Wall Street and much worse than in June when they retreated 0.3 percent.

In another report, the Labour Department said the number of Americans filing new unemployment claims rose last week by 10,000 to 348,000 in the week ended Aug. 19.

Traders said the stock market was searching for a bottom.

"The market is in a standoff and groping for a bottom and if it doesn't find one, it will sell off more," said Ken Ducey, director of trading at BT Brokerage.

Ralph Bloch, chief technical analyst at Raymond James, said, "The balance of power between the bulls and the bears is beginning to switch. The bears are going to get the short-term power."

Analysts said market activity could slow even further ahead of next Friday's key August jobs data and the Labour Day holiday.

"We're going to lose more liquidity and people are going to want to cash in their chips," Ducey said.

The shares of several computer chip stocks were down, as were some software companies that have new products geared to the Microsoft launch.

Intel Corp. lost 1-11/16 to 61-1/16 and Symantec Corp., which has several new utility software releases for use with Windows 95, slipped 1/8 to 30-1/2. Sun Microsystems fell 3/4 to 59-3/4.

Some initial public offerings made a splash. Plasma & Materials jumped 4 to 18 and Computron Software climbed nearly 3-1/4 to 20-3/4.

Camelot Corp. soared 2-25/32 to 7-1/16 on a report that its new Internet software product will permit computer users to drastically reduce their long-distance telephone bills.

The Standard & Poor's composite index of 500 stocks rose 0.32 to 557.46. The American Stock Exchange index rose 0.11 to 528.92.

The NYSE Composite index of all listed common stocks rose 0.34 to 299.35. The average share was up 4 cents.

The Wilshire Associates Equity Index -- the market value of NYSE, American and Nasdaq issues -- was 5,559.128 down 2.291 or 0.04 percent.-Reuter