Nervous Investors Drive Stock Prices Lower

Stocks fell sharply on Friday along with bond prices, as hopes faded for an interest-rate cut.

The Dow Jones industrial average slid 34.58 points to close at 4,423.99. At one point the blue chip index lost more than 50 points before partly recovering.

Declining issues led advancers by nearly 3 to 1 on the New York Stock Exchange, where volume was moderately heavy at 327.58 million shares as of 4 p.m., up from 289.82 million shares on Thursday.

Bonds and stocks extended a decline that began on Wednesday, after Alan Greenspan, chairman of the Federal Reserve, indicated that the central bank was not likely to cut interest rates at its July policy meeting.

The Dow Jones industrials had risen to set two new highs on Monday and Tuesday of this week, partly because investors had expected that rates would fall. Greenspan’s comments on Wednesday sparked a round of profit-taking that continued for the remainder of the week. With the 30-year Treasury bond off another 1 11-16 point on Friday, stocks were unable to muster a rally.

Some of the stocks that moved substantially Friday:

NYSE

Rubbermaid fell 3 3/4 to 26 7/8.

The Ohio kitchenware maker said Friday that its second-quarter earnings per share would “likely be in the high teens to low 20” cents, sharply below analysts’ mean expectations of 35 cents according to Zacks Investors Service. The company cited higher materials costs, which have driven up prices, and depressed consumer spending.

Philip Morris fell 1 1/4 to 70 1/4.

The stock was falling for the second day after The New York Times reported that the cigarette maker had studied the effects of nicotine on the body, seemingly in conflict with the company’s position that cigarettes should not be regulated like a drug.

Smith Corona fell 1/2 to 1 1/2.

The typewriter maker said it is in technical default of a credit agreement, blaming a previously reported $22 million pretax restructuring charge. The company said it is still in talks with its lenders but had no assurance that it could successfully amend the agreement.

NASDAQ

Banyan Systems fell 5 11-16 to 12 1/2.

The developer of computer networking software said its second-quarter earnings would be significantly below its 1994 second-quarter results of 22 cents per share, citing a longer sales cycle due to long-term customer agreements and announced competitive products.

Antec Corp. fell 8 to 15 1/2.

The developer of cable access television transmission products said earnings for the second quarter and calendar year will be “significantly” below analysts’ expectations. Analysts surveyed by First Call put the company’s second-quarter profits at a mean of 27 cents per share. The company said second-quarter earnings are expected to be less than 10 cents per share, citing costs tied to new product development and market expansion.

AMEX

Banyan Short-Term Income Trust rose 3/8 to 2 15-16.

The company said it expects to post a 35-centsa-share gain on the $14 million sale of its interest in the Boca Marina parcel in Boca Raton, Fla.