Technology Stocks Lead Market Slide

A slide in technology stocks, combined with diminished hopes for an interest rate cut by year-end, kept stock prices in negative territory Tuesday.

The Dow Jones industrial average fell 9.40 to 5,174.92. Broad-market indexes also fell.

“The Dow has been up over 450 points in the last six weeks,” said Alfred E. Goldman, vice president at A.G. Edwards & Sons Inc. in St. Louis. “It came a long way in a short time and now we are seeing a little correction. It’s a pause to refresh.”

Advancing issues led decliners by 11 to 8 on the New York Stock Exchange. Big Board volume totaled 349.41 million shares as of 4 p.m., vs. 342.06 million last Monday. Weakness in technology issues sent the Nasdaq composite index down 9.43 to 1,052.07.

A Labor Department report showing a higher-than-expected gain in wholesale prices for November raised fears about inflation and in turn, dampened hopes that a rate cut would soon come.

While lower rates would spur economic growth, they could also aggravate inflation pressures.

Some of the stocks moving substantially or trading heavily:

NYSE

Boeing, up 1-1/2 at 74-3/8.

Negotiators for striking Machinists and Boeing Co. have reached a tentative agreement on a contract to end a 67-day strike, the union said late Monday. Union leaders said they would recommend that striking production workers accept the four-year contract when they vote today.

Micron Technology, down 1-5/8 at 53-1/8.

Texas Instruments, down 1-3/4 at 54-1/2.

Motorola, down 1/2 at 61-1/2.

LSI Logic, down 25/64 at 35-63/64.

The Semiconductor Industry Association reported late Monday that demand for computer chips fell slightly in November but remained ahead of last year’s levels.

Esterline Technologies, up 3-1/2 at 23-3/8.

The Bellevue, Wash.-based company earned 84 cents a share in the fourth-quarter, compared to 80 cents a share in the same period a year ago, which included a 30-cent per share tax benefit.

NASDAQ

Micom Communications, down 2-1/8 at 7.

The Simi Valley, Calif.-based company said it expects revenues for the third quarter ending Dec. 31 to be approximately $16 million to $17 million, compared to the $20.3 million reported a year ago. As a result of these anticipated sales levels, Micom expects to report a net loss for the third quarter.

Avant, down 5-1/4 at 17.

The Sunnyvale, Calif.-based maker of circuit software denied rumors that it had to close due to a heavy storm in Northern California. The company also said it has not been served with any injunctions and there is nothing preventing it from developing, selling or supporting its products.