Agency stocks take another hit

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Agency stocks took a another hit today as the stock market continued dropping despite a cut in interest rates. The Dow Jones Industrial Average closed down 2.68%, losing 210.09 points to close at 7,632.63 on investors' continued worries about the business effects of the continuing international economic crisis and possible declines in corporate earnings.

Nearly every agency company was down or flat, as investors worried that advertisers will cut budgets as their profits stumble. Leap Group--which announced improved earnings this month--was the only gainer, rising 4.76%, up 12 cents to close at $2.75. Lois USA, Cordiant Communications Group and Saatchi & Saatchi were unchanged and True North Communications dropped 0.28%, losing six cents to close at $22.12.

Hardest hit was Interpublic Group of Cos., which lost 7.53%, dropping $4.06 to $49.88; it was followed by Grey Advertising which dropped 7.32%, closing down $24 at $304. Think New Ideas--which faces shareholder lawsuits filed Monday--lost 44 cents to close at $5.94, a 6.86% drop.

Among the major holding companies, WPP Group's American Depository Receipt shares dropped 6.85%, losing $3.12 on the Nasdaq exchange to close at $42.50; and Omnicom Group dropped 4.17% to close at $43.12. Young & Rubicam lost 5.07%, dropping $1.44 to close at $26.94.

Copyright October 1998, Crain Communications Inc.

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