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By Bill Rigby
NEW YORK (Reuters) - U.S. technology stocks fell on Tuesday as a disappointing
forecast from cellphone giant Nokia (news - web sites) Corp. sparked
a sell-off in heavyweights like IBM and Intel. The blue-chip Dow ended
slightly higher.
The dip in the Nasdaq came after three days of gains, which had taken
the tech-focused index to a six-week high.
"We're in a mode right now where there is so much caution that
the markets are in a wait-and-see attitude, with first-quarter earnings
really coming out next week," said Ozan Akcin, chief market strategist
at Puglisi and Co.
Nokia, the world's largest mobile phone maker, trimmed its quarterly
earnings forecast on Tuesday and said its handsets had not kept pace
with consumer demands, allowing rivals to take away market share.
The news unsettled Wall Street as it readies for quarterly earnings
to kick off in earnest.
Alcoa Inc., the first Dow component to report quarterly results, fell
after the bell as its earnings from continuing operations failed to
meet some analysts' expectations. Its shares fell to $35.14 in after-hours
trading, after closing up 61 cents at $36.50 in regular New York Stock
Exchange (news - web sites) trade.
The Nasdaq Composite Index ended down 19.22 points, or 0.92 percent,
at 2,059.90. The Dow Jones industrial average closed up 12.44 points,
or 0.12 percent, at 10,570.81. The Standard & Poor's 500 Index fell
2.41 points, or 0.21 percent, to 1,148.16, based on the latest data.
Trading was moderate, with 1.4 billion shares changing hands on the
New York Stock Exchange and 1.8 billion on Nasdaq, matching last year's
daily averages.
Decliners outnumbered advancers by about 21 to 12 on the NYSE and by
about 21 to 10 on Nasdaq.
Nokia was the most actively traded issue on the NYSE after its warning,
slumping $3.94, or 18.6 percent, to $17.21.
"Nokia was the first announcement that caught people by surprise,"
said William Dwyer, chief investment officer at MTB Investment Advisors
in Baltimore. "But I don't think it's the beginning of weaker earnings
across the board."
Nevertheless, marquee tech names followed with losses. International
Business Machines Corp. fell 48 cents to $93.70, while Intel Corp. dropped
28 cents to $28.27.
Nokia's warning also sent ripples through companies in the mobile telecoms
industry. Motorola Inc. fell 38 cents to $18.25 while Texas Instruments
Inc., the world's top maker of microchips used in cell phones, fell
$1.78, or 5.8 percent, to $29.16. Wireless chip maker RF Micro Devices
Inc., whose biggest customer is Nokia, fell 63 cents, or 7 percent,
to $8.27.
Bank of America Corp., the No. 2 U.S. banking company, limited losses
for the S&P 500 after it said it planned to cut 12,500 jobs over
the next two years as a result of its $48 billion purchase of FleetBoston
Financial Corp. Its shares rose 75 cents to $82.00.
(Additional reporting by Elizabeth Lazarowitz, Vivian Chu)
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