Dow Skids On Technology Sell-Off

Stock prices sank Tuesday for the second consecutive day, spurred by a sell-off of technology stocks amid new doubts about the industry’s outlook.

The Dow Jones industrial average dropped 16.98 points to 4,797.03, recovering from the 25-point fall earlier in the day. The Dow fell nearly 12 points on Monday.

Declining issues led advancers by 1,238 to 1,025 on the New York Stock Exchange, with 806 unchanged. Volume reached 363 million shares as of 4 p.m.

“The main focus of this market was the drop in tech shares,” said Leon Brand, global market specialist at NatWest Securities. “There was a lot of profit taking as many investors turned away from this group” on fears the sell-off may continue.

Leading the sell-off was chip maker Cirrus Logic Inc. which was down 12-3/4 to 28 after it said a major customer is reducing orders for graphics and audio chips.

In addition, Soundview Financial Group, which is closely followed for its analysis of technology companies, downgraded five semiconductor companies.

Some of the stocks that moved substantially Tuesday:

NYSE

Micron Technology, down 3-5/8 at 60-7/8.

Texas Instruments, down 1-5/8 at 60-7/8.

LSI Logic, down 3-1/2 at 41-1/2.

Merrill Lynch reportedly downgraded the technology stocks to “hold” from “above average.”

NASDAQ

Cirrus Logic, down 12-3/4 at 28.

The chip maker said a major customer is reducing orders for certain graphics and audio chips. Cirrus said the cutback was partly a result of the customer’s forecast for demand. The Fremont, Calif.-based company said this would reduce revenues for the current quarter.

Apple Computer, up 1-1/2 at 39-5/8.

CNBC financial correspondent Dan Dorfman said there were unconfirmed rumors that Hewlett-Packard may buy the computer maker.

Intel, down 4-7/16 at 66-3/8.

Merrill Lynch reportedly downgraded the chip maker from “buy” to “hold.”

Oxford Health Plans, down 13-1/8 at 69-1/4.

The managed care company reported strong earnings for the third quarter, but predicted its would show weaker results in the fourth quarter.

AMEX

Hawaiian Airlines, down 5/8 at 2-3/4.

The carrier said late Monday it has agreed to sell a controlling interest to an unidentified private investor group for $20 million.