Stocks close lower in light trading

By DUNSTAN PRIAL

Associated Press

NEW YORK — Stocks closed lower today in slow holiday trading, as the technology sector remained under fire from investors concerned about weakening profit growth.

The Dow Jones industrial average closed down 28.11 at 10,568.43.

Broader stock indicators also closed lower. The Nasdaq composite index fell 5.45 to 3,355.56, after recovering from a loss of more than 100 points earlier in the session. The Standard &amp Poor’s 500 index closed down 6.96 at 1,402.03.

Tech stocks have been under pressure for weeks amid a string of profit warnings.

Other sectors are also feeling the pinch. Shares of home furnishings company Williams-Sonoma fell $7.88 to $19 and property-casualty insurer Safeco Corp. lost $1.25 to $24.50 after announcing separately Monday that quarterly earnings would fall below expectations.

"The main force of this downward pressure is the downward shift in expected profits by companies outside the energy sector," said Richard Hoey, chief economist and chief investment strategist at Dreyfus Corp. in New York.

The trend has pushed the Nasdaq to its lowest level since May.

On Monday, U.S. technology stocks were dragged down by an overseas earnings scare, prompted by warnings issued from the European computer and telecommunications sectors.

Hoey said company profits are shrinking in the wake of a general global economic slowdown, a deceleration that has been especially noticeable in the U.S.

Also, high energy prices have increased production costs while at the same time siphoning away consumers’ personal income.

Finally, weakened foreign currencies — especially the euro — have cut into the profits of U.S. companies with large overseas operations.

Inflation concerns have also crept back into the picture since the Labor Department reported an unexpected drop in unemployment on Friday.

Many widely held Nasdaq companies were down Monday. Microsoft fell $1.38 to $54.19, Cisco Systems was down $2.50 at $53.69, and Amazon.com lost $1.50 to $30.06.

In addition, shares of Connetics Corp., a biopharmaceutical company, fell $20.19, or 79 percent, to $5.31 after announcing that a flagship product for treating scleroderma had failed in recent trials.

But bargain hunters helped the Nasdaq recover somewhat from an early selloff. Bellwether Internet stocks, including eBay, up $1.50 to $60.94 and Yahoo!, up $4.50 to $85.75, were down considerably earlier in Monday’s session.

And several Internet parts and software companies saw big gains: Ariba rose $8.94 to $122.69, Sycamore Networks rose $8.75 to $87, and Juniper Networks gained $9.81 to $199.56.

Declining issues outnumbered advancers by a 5-to-4 ratio on the New York Stock Exchange, where consolidated volume came to 860.89 million shares, well below Friday’s pace of 1.37 billion. Trading was light due to the Columbus Day and Yom Kippur holidays.

The Russell 2000 index closed down 1.49 at 489.53.

Overseas, markets in Japan were closed for a holiday. In European trading, Germany’s DAX index was down 1.41 percent, Britain’s FT-SE 100 was down 1.98 percent, and France’s CAC-40 was down 2.37 percent.

Copyright ©2000 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.