NEW YORK July 10: Profit-taking wiped out Tuesday's gains as blue chip stocks fell sharply on Wednesday after Dow neared the psychologically significant 8,000-point level. The Dow Jones Industrial Average fell 119.88 points to 7,842.43. Some 594 million shares changed hands in heavy trading as decliners outnumbered gainers by 1,707 to 1,145.

On the bond market, the average yield on the bellwether 30-year US Treasury bond dropped to 6.56 per cent against 6.58 per cent late Tuesday. Traders did not react to the first offer of US Treasury bills indexed to inflation. The Dow at one point had climbed to 7,991 points but fell back as traders opted for profit taking in the face of the historic 8,000-point threshhold. Banking stocks were lower after Wells Fargo said it expects second-quarter earnings to fall one dollar short of consensus estimates.

Wells Fargo was down 18-3/8 at 260-5/8, Citicorp down 1-3/8 at 126-13/16, ChaseManhattan was 1-5/16 lower at 101-3/4, Bank America down two at 66-3/16 and JP Morgan down 3-1/8 at 106-3/8. Semiconductor manufacturers benefited from Motorola's Tuesday announcement that its second-quarter earnings were higher than expected. Motoral rose 3-1/4 to 86 and Texas Instruments 3-3/4 to 95-3/4.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.