Technology Shares Lead A Nervous Pullback

Technology shares continued to stumble Monday, pulling down the broad market, amid more profit-taking on January’s gains and more disappointing earnings news from the computer networking sector.

The Dow Jones industrial average fell 49.26 to 6,806.54, having surrendered a 20-point gain.

Broader measures also fell, with the steepest drop coming in the technology-laden Nasdaq market. Investors also moved to lock in some profits in other recent leaders, such as oil companies, which have retreated with crude prices.

“You’re seeing a lot of stocks get beat up today, stocks that had been the winners of the last 12 months,” said Don Hays, director of investment strategy at Wheat First Butcher Singer in Richmond, Va. A week ago, Hays cut his firm’s recommended stock allocation in an investment portfolio to its lowest level since 1990. “People are anxious to take some of that money they’ve made and put it on the sidelines.”

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

NYSE

IBM, down 6 at 142-3/4.

An analyst at Cowen & Co. lowered his earnings estimates for the computer maker, the Dow Jones News Service reported. A company source said the numbers were lowered to reflect a stronger dollar, which cuts into the value of foreign revenues.

Westinghouse Electric, down 3/8 at 17-3/8.

Gaylord Entertainment, down 3-1/8 at 22-1/4.

Westinghouse agreed to acquire two country music cable channels, The Nashville Network and Country Music Television, from Gaylord for $1.55 billion in stock.

NASDAQ

3Com, down 13-1/2 at 37-1/4.

Cisco Systems, down 5-1/8 at 58.

Cascade Communications, down 1-13/16 at 35.

Computer networking shares slid again after 3Com warned that earnings for its third quarter ending Feb. 28 will be disappointing. 3Com, based in Santa Clara, Calif., expects to show a per-share profit in the mid-40 to low-50 cents range. Analysts had forecast earnings of about 60 cents a share.

Plasma & Materials Technologies, up 3-1/4 at 15-1/8.

The machine maker for the semiconductor industry said it has found a unique way to quadruple the performance of microprocessors, an advance that could speed up many computer functions. The production improvement is still in the test stage.

AMEX

Identix, up 2 at 12-3/4.

Oracle said upcoming releases of its networking software will include fingerprint-recognition technology made by Identix. The technology includes a palm-size device that will compare users’ fingerprints to sets stored in a central file before letting them log on to a machine.