World stocks: Techs suffer a sell-off but Dow closes higher

NEW YORK - Technologies closed lower on Tuesday when the Federal Reserve continued to warn that the risk of higher inflation loomed over the US economy and speculation over further earnings' shocks hurt computer-related stocks.

The central bank left its key Fed-funds' rate steady at 6.5 per cent but the Fed said a tight labour market and high energy prices threatened to boost inflation expectations.

That, together with speculation that IBM's third-quarter earnings would disappoint, sparked a sell-off that drove the Nasdaq down.

"The reason the market is having trouble is that the concerns over the growth rate of earnings is deepening and stocks with high multiples will go down," Hugh Johnson, chief investment-officer at First Albany Corp said.

Apple was down $US1 15/16 to $US22 5/16, Intel rose 3/16 to $US40 5/16 and IBM fell $US7 1/4 to $US110 9/16 amid talk it would announce weaker earnings, although analysts discounted the rumours.

The Dow closed 19.61 points higher, at 10,719.74.

Shares in London got off to a weak start last night (Britain's Wednesday morning) as the after-effects of a late slide in New York technology stocks hit UK counterparts.

The FTSE-100 index of leading shares dropped as much as 25 points initially, before rowing back to a 16 point or 0.3 per cent deficit at 6329.0 points, wiping out nearly a third of Tuesday's 60.5-point gain.

Tech stocks listed on London's techMARK 100 took their cue from the late fall in New York's Nasdaq, dropping 1.2 per cent to 3800.