Tech concerns drive market down despite drop in crude

NEW YORK - Wall Street stumbled lower yesterday as growing concerns over technology companies led jittery investors to pull money out of the market ahead of this week's earnings reports.

The market has been vulnerable to erratic trading lately, with investors cautious about the direction of the economy and companies' results. The tech sector so far has been knocked down the most, after Apple Inc.'s and Intel Corp.'s outlooks last week fell below the Street's expectations.

With industry leaders like Qualcomm Inc. and Microsoft Corp. releasing their financial results later this week, many investors are bracing for disappointment.

"The market is nervous," said Joe Ranieri, managing director in equity trading at Canaccord Adams. "We've had a few good quarters in a row in tech land. The problem with having good quarters is, it gets harder and harder to impress."

Blue-chip stocks were also dragged down by a Wachovia Corp. analyst's downgrade of Boeing Co.; the analyst cited possible delays in aircraft orders for the jet-maker.

Overall, earnings reports and economic data this year have signaled growth that's cooling, but not so quickly that it is squeezing corporate profits. This would normally be good news for the stock market, but investors have been retreating - wisely, many market watchers say - on signs they may have gotten ahead of themselves late last year, when the Dow began racing into record territory.

The Dow Jones industrials fell 88.37, or 0.70 percent, to 12,477.16 - the biggest one-day drop since Nov. 27, when the index fell 158 points. Earlier in yesterday's session, the Dow had declined 114 points.

Broader stock indicators also dropped. The Standard & Poor's 500 index fell 7.55, or 0.53 percent, to 1,422.95, and the Nasdaq composite index lost 20.24, or 0.83 percent, closing at 2,431.07.

Bond prices rose, though investors' hopes for a cut in interest rates have dwindled in response to upbeat economic data. The yield on the benchmark 10-year Treasury note edged lower to 4.76 percent from 4.78 percent late Friday.

The stock indexes rebounded slightly from the session's lows after crude oil resumed its downward trend. With the price of crude oil down 16 percent this year, consumer spending could be boosted by lower fuel costs.

Crude fell 86 cents to settle at $51.13 a barrel on the New York Mercantile Exchange, after briefly rising above $53.44.

Relief about oil's decline was not enough, though, to offset technology-related worries, which were kindled by analyst downgrades of Cisco Systems Inc., the world's largest maker of networking equipment; Motorola Inc., the world's second-largest cell-phone-maker; and computer-maker Dell Inc.

Cisco fell 17 cents to $26.53; Motorola fell 55 cents, or 2.9 percent, to $18.72; and Dell dropped 53 cents, or 2.1 percent, to $24.49.

Chip-maker Advanced Micro Devices Inc. fell after rival Intel Corp. and Sun Microsystems Inc. announced an alliance that could take away some business from Advanced Micro.

Advanced Micro, which will release its earnings today, fell 20 cents, to $17.53.

If Advanced Micro's earnings report comes in better than expected, the tech sector could rebound today. Texas Instruments Inc. reported after the market closed yesterday that its fourth-quarter earnings surpassed the Street estimate and that it would slash jobs to reduce costs. The cell-phone-chip-maker rose 53 cents to $29.12 in after-hours trading, after its 20-cent rise to close at $28.59.