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Wall Street pulls back
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January 7, 1999: 10:16 a.m. ET
Stocks drop as investors book profits after spectacular rally Wednesday
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NEW YORK (CNNfn) - Wall Street suffered a hangover Thursday, with stocks taking a hit in early trading after Wednesday's spectacular rally that took the Dow, the Nasdaq and the S&P 500 to record highs.
Concerns that the market may have run up too fast, a slight drop in the equity allocation in the model portfolio of Goldman Sachs' Abby Joseph Cohen, as well as shaky performances in markets overseas and a severe sell-off in Brazil, all contributed to the stock market's declines.
At around 10 a.m. ET the Dow Jones industrial average fell 74.66 points to 9,470.31. Trading volume on the New York Stock Exchange reached 107 million shares, with declines leading advances 1,752 to 610.
The Nasdaq Composite lost 30.43 to 2,290.43 and the S&P 500 index dropped 13.94 to 1,258.40.
The bond market traded lower, hurt again by renewed declines in the dollar against the yen. The benchmark 30-year Treasury bond was down 24/32 of a point in price for a yield of 5.21 percent.
The dollar resumed its slide against the yen overnight and remained lower in U.S. trading. The U.S. currency also traded lower against the euro.
Merger saga continued
In stocks, the ongoing competition for the buyout of AirTouch Communications (ATI) entered a new phase following a USA Today report that MCI WorldCom (WCOM) may also enter the bidding war. That would put MCI WorldCom in competition with Bell Atlantic (BEL) and British group Vodafone (VOD), which have already offered to pay $45 billion and $55 billion for AirTouch respectively.
Shares of AirTouch bucked the overall market trend, rising 2-1/8 to 82. But the stocks of most of its bidders fared worse. MCI WorldCom lost 3-15/16 to 74-7/16, Bell Atlantic was up 13/16 to 56-11/16 and American depositary receipts of Vodafone dropped 4-7/8 to 175-7/8.
Financial stocks were also among the day's focus sectors following better-than-expected earnings reports from two of Wall Street's premier outposts. Shares of Lehman Brothers (LEH) climbed 1-1/2 to 55-1/8 after the brokerage said it earned 51 cents per diluted share in the fourth quarter, well above consensus expectations for 21 cents a share.
Fellow financial firm Morgan Stanley Dean Witter (MWD) saw its shares gain 2-1/2 to 83-3/16 after posting earnings of $1.49 a share in the fourth-quarter, compared to $1.30 a share a year earlier and well above market expectations for 96 cents a share.
Elsewhere in the financial world, shares of Merrill Lynch (MER) rose 1/16 to 76-15/16 and Dow component Citigroup (C) was up 1/2 to 54-7/8.
Technology stocks, however, lost part of their luster as investors pocketed some gains from the sector's recent run-up. Shares of Dow component IBM (IBM) eased 5/8 to 188-1/8. Dell Computer (DELL) fell 1-3/8 to 76-3/4, Microsoft (MSFT) declined 1-9/16 to 149-11/16 and Intel (INTC) dropped 7/8 to 128-5/8. 
-- by staff writer Malina Poshtova Zang
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