US stocks: Markets tumble, techs bear brunt

NEW YORK - US stocks fell to fresh year lows on Monday, with technology shares bearing the brunt of the decline as a fall in software company Autodesk Inc. and a drop in chipmakers weighed.

Meanwhile, a rise in oil prices to near US$49 a barrel dampened industrial stocks, but lifted energy companies' shares such as Exxon Mobil Corp.

The tumble added to a weak start to 2005. Sentiment this year has been dominated by concerns over slowing earnings growth, rising interest rates and strengthening oil prices, as well as worries about mounting tension before the Iraq election in less than a week's time.

The Dow Jones industrial average was down 24.38 points, or 0.23 per cent, to finish at 10,368.61. The Standard & Poor's 500 Index was down 4.12 points, or 0.35 per cent, to end at 1,163.75. The Nasdaq Composite Index was down 25.57 points, or 1.26 per cent, to close at 2,008.70.

The Nasdaq, the Dow and the S&P 500 all ended lower for the fourth consecutive session. The Nasdaq closed at its lowest level since Nov. 3, the Dow since Nov. 4 and the S&P 500 since Nov. 10.

Trading was active, with 1.49 billion shares changing hands on the New York Stock Exchange, just above the 1.46 billion daily average for last year. About 2.13 billion shares were traded on Nasdaq, above the 1.81 billion daily average last year.

Decliners outnumbered advancers on the New York Stock Exchange by about 10 to 7 and by about 7 to 3 on Nasdaq.

"The weakness could be driven by earnings, or a slowing down in the economy, or even uncertainty over the Iraqi elections, said John Hughes, managing director at Epiphany Equity Research. "The violence is escalating and it's an overhang for the market."

Weighing on the tech-heavy Nasdaq was a warning by German chipmaker Infineon that it expects lower sales and earnings this quarter, adding to evidence of a global slowdown in chip demand. Infineon's ADRs fell nearly 4 per cent, or 37 cents, to US$8.97.

The Philadelphia Stock Exchange Semiconductor index fell 1.7 per cent. Intel Corp. slid nearly 2 per cent, or 43 cents, to US$21.99.

Autodesk also dragged, falling nearly 12 per cent, or US$3.74, to US$27.58 after Banc of America cut its investment rating to "sell" from "neutral," citing expectations for slower sales growth.

Energy companies' shares gained as the price of crude oil climbed. US March light crude rose 28 cents to settle at US$48.81 a barrel. Exxon Mobil rose 69 cents, or 1.4 per cent, to US$51.13, and ChevronTexaco climbed 59 cents, or 1.1 per cent, to US$52.57.

High oil prices help the stocks of energy companies, although they dampen the overall market as they impact corporate profit margins and consumer spending.

Industrial-related stocks slipped, with Caterpillar Inc. down US$1.11, or 1.2 per cent, at US$88.12, and United Technologies Corp. down US$1.08, or 1.1 per cent, at US$99.

Among other declining stocks was Procter & Gamble Co., down 44 cents, or 0.8 per cent, at US$55.21 after UBS lowered its investment rating on the consumer products company to "neutral" from "buy," citing valuation.

However, Dow component McDonald's Corp. rose 1.6 per cent, or 49 cents, to US$31.74 after CIBC World Markets raised its rating on the fast-food company to "sector outperformer" from "sector performer," saying its European business was poised for a rebound.

Meanwhile, American Express Co., also a Dow stock, gained 67 cents, or 1.3 per cent, to US$52.60. The company said fourth-quarter profits rose because of increased spending by consumers. (Additional reporting by Anna Driver)

- REUTERS