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Monday's Markets

Investors sell amid interest rate fears

Stocks dropped sharply Monday in a sell-off that traders attributed to rising interest rates, weaker markets abroad and concern about the U.S. automotive trade dispute with Japan. The Dow Jones industrial average fell 34.59 points to 4,551.25.

Analysts say the stock market's recent rise to new highs and a decline in interest rates have come in large part amid the sense that the economy is weakening and that the Federal Reserve might feel compelled to cut rates again soon, perhaps as early as its meeting next week.


KERKORIAN STILL WANTS BIGGER STAKE IN CHRYSLER. Less than a month after billionaire Kirk Kerkorian dropped a $22.8-billion hostile bid to buy the No. 3 automaker, Chrysler's largest stockholder said Monday that he will spend $700-million to increase his stake in the company. Kerkorian's Las Vegas-based Tracinda Corp. offered to buy 14-million shares at $50 each _ $5 a share less than what he offered to pay for the company in April. The additional stock would raise Kerkorian's ownership to 50-million shares, or just under 15 percent of the company. Chrysler closed Monday at $47.37{, down 25 cents.

HOME SALES INCREASE. The lowest mortgage rates in more than a year pulled prospective home buyers back into the market in May. Existing home sales rose 4.7 percent last month, according to the National Association of Realtors. That followed a loss of 6.4 percent in April.

SIX FLAGS SALE CLOSES. Time Warner Inc. said Monday that it has closed the $200-million sale of a majority stake in its Six Flags amusement park unit to an investment group led by Boston Ventures. The investor group also assumes $800-million of the unit's debt. Boston Ventures now owns 51 percent of Six Flags, while Time Warner, the entertainment giant based in New York, retains a 49 percent stake.

Tampa Bay/State

POCAHONTAS CONCERNS DEPRESS STOCK. Shares of Walt Disney Co. slipped Monday amid concern that the company's new animated film, Pocahontas, won't gross as much as expected. The entertainment company's stock fell $2.50 to $57 after the film grossed $30.5-million at the U.S. box office last weekend. While it outsold Time Warner Inc.'s Batman Forever, totals from the film's national debut fell short of some analysts' estimates and Disney's previous animated release, The Lion King.

PMSI SHAREHOLDERS APPROVE MERGER. Pharmacy Management Services Inc. shareholders have approved the merger of PMSI into Beverly Enterprises Inc. The $150-million deal was expected to be completed today. Under the agreement, each outstanding share of PMSI common stock would be converted into 1.3469 shares of Beverly common stock. Tampa-based PMSI provides medical cost containment and managed care services. Beverly Enterprises, based in Fort Smith, Ark., operates 774 nursing homes in 34 states _ including nine in the Tampa Bay area, ranging from the Dade City Geriatric Center to Wellington Manor in Tampa.



4551.25 84.40 6.54

-34.59 +0.10 +0.05