Dow Dips As Investors Mark Time

Stocks ended mixed on Thursday, as investors kept to the sidelines ahead of Friday’s release of inflation data.

The Dow Jones industrial average slipped 3.46 to 4,458.57 in its second drop in four trading sessions.

Declining issues edged out advancers on the Big Board, where volume was a light 289.82 million shares as of 4 p.m., down from 327.73 million Wednesday.

The Dow industrials set new highs on Monday and Tuesday of this week but began to fall on Wednesday, when Federal Reserve Chairman Alan Greeenspan indicated that the the Fed is not likely to lower interest rates any time soon.

The stock market had priced in an easing, said Trude Latimer, a market analyst with Ferguson Andrews in Charlottesville, Va. Now, “it’s not so much that they’re worried that he’ll increase rates, but that he may not drop them” at the Fed’s next policy meeting in July, Latimer said.

That concern, coupled with President Clinton’s veto on Wednesday of Republican-sponsored legislation to cut federal spending, has given investors an excuse to take profits, said A.C. Moore, president of Dunvegan Associates in Santa Barbara, Calif.

Some of the stocks that moved substantially or traded heavily Thursday:

NYSE

Philip Morris fell 1 1/2 to 71 1/2.

The cigarette maker spent 15 years studying how nicotine affects the brains and behavior of smokers, work that contradicts the company’s arguments against regulating nicotine as a drug, The New York Times reported.

Boeing rose 1 1/8 to 62 1/4.

USA Today reports that a Lehman Brothers analyst believes the aircraft maker’s shares could rise to $100 per share before they peak, but could hit some “turbulence” on the way.

IBM fell 1/2 to 89 3/8.

AT&T rose 5/8 to 50 1/2.

IBM continued to pursue its hostile bid for Lotus Development, a software company whose shares rose 1 1/8 to 63 1/2 in Nasdaq trading. A story in The Wall Street Journal suggested that if IBM wins Lotus, IBM and AT&T could become powerful allies in setting up a communications network using Lotus’s Notes system.

Motorola rose 1 1/8 to 60 5/8.

The company won a $100 million contract to supply a wireless telephone system to Hungary.

NASDAQ

Mesa Airlines rose 1 1/8 to 8 3/8.

Alex. Brown upgraded the shares to “buy” from “neutral,” citing firmer East Coast fares.

Starbucks rose 1 3/8 to 33 5/8.

The William Blair investment company started coverage of the stock with a “buy” rating.