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Blue chip stocks finish

with small losses

NEW YORK: Blue-chip stocks gave up earlier big gains in late trading to end slightly lower on Monday as weakness in bellwether International Business Machines Corp. sent the market to its fifth consecutive loss.

"Technology stocks are under the gun and sapping strength from the rest of the market," said William Raftery, technical analyst at Smith Barney.

The Dow Jones industrial average fell 2.82 points to 4,614.78 after trading up nearly 40 points. Gainers beat losers 1,320 to 899 on moderate volume of 303 million shares on the New York Stock Exchange.

The technology-heavy Nasdaq composite index shed 11.58 points, or 1.12 percent, to 1,019.70.

IBM fell 4-5/8, or more than 4 percent, to 106-3/4. IBM said it would delay the general availability of a new mainframe storage device, called the RAMAC 2, until Oct. 27 from end-August due to ongoing quality testing.

"IBM is certainly a flagship stock and has put a damper on most but not all price action," said Bob Stovall, president of Stovall/21st Advisers.

Indeed, drug stocks rallied after merger activity refocused investor attention on the group. Analysts said the weekend's $13 billion merger pact between Upjohn and Sweden's Pharmacia AB and Friday's $2.6 billion bid by Rhone-Poulenc for Fisons revived the group.

"The market is feeling good about multiple marriages being proposed," said Alfred Goldman, technical research director at A.G. Edwards.

Upjohn added 1-1/8 to 40-3/4, Rhone-Poulenc was up 1-3/4 to 43-7/8, Pfizer rose 7/8 to 49 and American Home Products was up 3/4 to 79-1/4.

A key focus for Tuesday will be the meeting of the Federal Reserve's policy-setting Federal Open Market Committee meeting. The Fed, which cut interest rates in July for the first time in nearly three years, is widely expected to hold rates steady this time.

"No change is expected," Stovall said.

Another focus will be the technology group, which led the market to its record gains in the first half of 1995.

Intel shed 4-5/8 to 60-1/4 as analysts cut third-quarter earnings estimates on the company. Microsoft lost 2-5/8 to 94-1/2 and Applied Materials shed 8-1/4 to 105.

Personal computer makers were hurt by recent cuts in their prices. Hewlett-Packard lost 3-3/4 to 79-3/4, Digital shed 1-1/8 to 40-7/8 and Compaq was off 2-3/8 to 50-1/4.

Meanwhile, Boeing Co. added 1-5/8 to 64-7/8 after reports that Air China agreed to buy up to 15 Boeing 777s in a deal worth up to $2 billion. Boeing declined comment on the reports.

C-Cube rose 4 to 44. The company said it expected rapid growth in sales of products using its digital video compact disc technology.

The Standard & Poor's composite index of 500 stocks fell 1.10 to 558.11. The American Stock Exchange index was off 0.99 to 528.21.

The NYSE Composite index of all listed common stocks rose 0.12 to 299.91. The average share gained 2 cents.

The Wilshire Associates Equity Index -- the market value of NYSE, American and Nasdaq issues -- was 5,566.131 down 9.839 or 0.18 percent.-Reuter