Stocks Slip on Technology Retreat
Thursday, June 22nd 2000, 12:00 am
By: News On 6
NEW YORK (AP) â€” Stocks fell Thursday as traders took profits from a runup in technology shares, sending the Nasdaq composite index back below 4,000 points.
According to preliminary calculations, the Dow Jones industrial average fell 121.62, or by 1.2 percent, to close at 10,376.12, while the Nasdaq composite index was down 127.11, or 3.1 percent, at 3,936.90.
The Nasdaq had breached the 4,000-point barrier two days ago for the first time in more than two months. But selling in technology shares Thursday spread to other sectors, bringing the overall market lower.
Tech shares that were giving up ground included Micron Technology, which fell $6.25 to $84.50 as traders worried that the chip maker's earnings, due after the close of trading, might fall short of expectations.
Mobile phone maker Nokia was also down on rumors that it was buying telecom technology company Qualcomm. Nokia shares were off $5.50 to $55.50, while Qualcomm's shares rose $4.438 to $68.938. Neither company immediately returned calls seeking comment.
Among tech bellwethers that were retreating from recent gains, Intel was off $4.313 at $134.688 and International Business Machines was down $2.813 to $111.688 Yahoo! fell $10.063 to $132.75 after an analyst expressed concerns about the outlook for online advertising.
Heading into Thursday's trading, the Nasdaq index had climbed for five straight sessions.
The Nasdaq, which was close to breaking even for the year on Wednesday, remained below its Dec. 31, 1999, finish of 4,069.31. But it has come back from its low point on May 23, when the Nasdaq was down 28.6 percent from the end of last year.
Traders were also looking ahead to the Federal Reserve's regular meeting Tuesday and Wednesday. There have been signals that the economy has been slowing in response to the Fed's series of interest rate increases, but investors are still bracing for the possibility that the Fed may tighten credit further to keep inflation in check.
``We're seeing some profit-taking,'' said Tom Galvin, chief equity strategist at Donaldson, Lufkin & Jenrette Securities. ``I think we're digesting the gains of the Nasdaq over the past four weeks and looking ahead to the Fed meeting and the likelihood of several earnings confessions next week.''
Traders said there was little effect from a rumor, quickly denied by the Fed, that the central bank's chairman, Alan Greenspan, was in an auto accident.
Declining issues outnumbered advancing ones by an 11-to-6 margin on the New York Stock Exchange, where volume came to 1.01 billion shares as of the 4 p.m. EDT close of the Big Board, down slightly from 996.69 million shares Wednesday.
The Standard & Poor's 500 index was off 26.88 at 1,452.28, and the Russell 2000 index was down 12.59 at 515.02.