Sluggish Computer Sales Trigger Stock Sell-Off

Stocks fell Wednesday amid renewed concerns about the health of personal computer sales.

The Dow Jones industrial average ended 14.09 points lower at 5,655.42. A late surge in bonds prompted institutional buying in the stock market, trimming a midafternoon loss of 52 points.

Coincidentally, the Dow lost exactly what it did on Tuesday. It has chipped 28.18 points off its 98.63-point gain Monday, when it reached a record closing high of 5,683.60.

Declining issues barely led advancers on the New York Stock Exchange. Big Board volume was heavy at 408.99 million shares as of 4 p.m., but below Tuesday’s pace.

Stocks weakened despite a rise in bond prices. The 30-year Treasury bond was up 1 point late in the session, mostly on technical factors, yielding 6.63 percent.

But stocks could not hold out against the fierce sacking of computer shares.

“It’s pretty ugly,” said David Ambrose, a trader at the SoundView Group brokerage firm, which specializes in computer issues. “There’s just a lot of concern around the PC sales, especially on the consumer side, and that blows off into the semiconductor side and across the whole group.”

Some of the stocks that moved substantially or traded heavily Wednesday:

NYSE

Digital Equipment fell 11-1/4 to 56.

The Maynard, Mass. computer maker said its third-quarter earnings will fall below Wall Street estimates because of weaker-than-expected personal computer sales and price cuts, although they will exceed those of the year-ago period.

IBM fell 4-3/4 to 117.

Hewlett-Packard fell 3-5/8 to 97-5/8.

PaineWebber reiterated its unattractive rating on IBM and downgraded Hewlett-Packard to neutral from attractive following Digital’s comments.

Rockwell International Corp. rose 1-1/2 to 60.

Boeing fell 3/4 to 87.

McDonnell Douglas rose 3/4 to 95-1/8.

Rockwell has been seeking to sell its aerospace and defense holdings, valued at $3.5 billion or more, to focus on its electronics business. The Wall Street Journal, citing unidentified sources, said possible purchasers include Boeing Co. and McDonnell Douglas Corp.

NASDAQ

Cirrus Logic fell 1/2 to 18-1/8.

Intel fell 3-1/4 to 55-1/2.

Applied Materials fell 1/2 to 35-7/8.

Sun Microsystems fell 2-1/2 to 43-5/8.

Semiconductor stocks fell after Cirrus said it expected to report a “significant” loss for the current fourth quarter, citing declining chip prices, and laid off 13 percent of its employees because of a slump in personal-computer sales growth.