Dow Slides Despite Strong Technology Profits

Strong technology earnings drove broad stock indexes higher on Wednesday, but the Dow Jones industrials stumbled on a selloff of economically sensitive issues.

The Dow industrial average slid 18.42 to 4,777.52. Despite the weak industrial average, advancing issues edged out decliners on the New York Stock Exchange. Big Board volume was heavy at 411.28 million shares as of 4 p.m., up from 356.38 million on Tuesday.

Technology stocks were guided higher by Microsoft, which soared 4-1/2 to 95-5/8, after the software maker reported a 58-percent jump in first-quarter earnings late Tuesday.

Microsoft’s earnings, plus those of Intel released late Monday and Compaq on Tuesday, signaled to investors they could count on strong quarterly earnings from the technology sector.

“People had been looking for some downside surprises” in technology earnings “that haven’t come to fruition, with the possible exception of IBM,” said Arthur Hogan, head of equity trading at Dean Witter Reynolds Inc.

“As long as the technology sector acts this well, the market will stay strong.” But, he cautioned, “We’re still trading at pretty lofty levels.”

Some of the stocks that moved substantially Wednesday:

NYSE

First Interstate Bancorp rose 34-1/4 to 140-1/4.

Wells Fargo rose 15-3/8 to 229.

Wells Fargo announced a a hostile $10.2 billion takeover bid for First Interstate that would create the nation’s seventh-largest banking business.

IBM fell 1/2 to 96-3/8.

The computer giant reported a third-quarter loss of $538 million, or 96 cents a share, after logging a pretax charge of $1.84 billion for its acquisition of Lotus Development Corp. Without the charge, IBM would have earned $1.3 billion, or $2.30 a share. The company earned $710 million, or $1.18 a share, in the third quarter a year ago.

Ford Motor fell 5/8 to 30-1/8.

Chrysler fell 1/4 to 54-1/4.

General Motors fell 1-1/8 to 45-3/8.

Ford said its third-quarter profit declined 68 percent from a year ago, as it cut production. The nation’s second-biggest automaker earned 28 cents a share, compared with $1.04 a share, a year ago. Chrysler reported last week that its profits for the period were down nearly 46 percent, while GM said Tuesday its profit rose 16.4 percent.

NASDAQ

Microsoft rose 4-1/2 to 95-5/8.

The software company said late Tuesday that its fiscal first-quarter net earnings rose to 78 cents per share from 51 cents a year ago.

AMEX

Ivax fell 4-1/4 to 27-1/4.

Ivax is merging with Hafslund Nycomed AS of Norway, combining the world’s largest generic drug company with the biggest maker of chemical dyes that help doctors read X-rays.