Tech Industry

Dow sinks 265 on triple-witching day

Tech stocks show moderate gains, while the Dow Jones industrial average gets sideswiped.

Tech stocks posted moderate gains, while the peculiarities of triple witching wreaked havoc on other holdings.

Triple witching is when futures contracts, stock index options, and options on individual stocks expire at the same time. The events can lead to heavy volume and sharp swings in certain stocks.

Triple witching helped push the Dow Jones industrial average down 265.52 to 10,449.30. The index shed 2 percent for the week, led by J.P. Morgan and other financial stocks.

Conversely, the Nasdaq composite index gained 14.82 to 3,860.56--barely changed from last week's close of 3,874. The Standard & Poor's 500 index dropped 14.14 to 1,464.46, also little changed from last week.

In addition to today's triple witching, investors had to digest some important economic data that could influence the course of interest rates.

The Commerce Department reported that new housing construction for the month of May fell 4 percent to a year low of 1.59 million homes. The slowdown may indicate a cooling in the overall economy, which provides more evidence against the Federal Reserve raising interest rates on June 28.

Among widely held tech issues, Intel closed down $2.19 at $126.06, while Microsoft gained 19 cents to $72.56.

The CNET tech index remained almost unchanged, dipping 0.65 to close at 2,846.78. Losers edged out winners, with 55 of the 97 stocks in the index sliding, 40 rising and two remaining unchanged.

Of the 18 sectors tracked, computer memory storage companies posted the biggest gains, rising about 6 percent. Computer peripheral makers were the day's largest losers, falling nearly 3 percent.

Shares of Rambus, a designer of computer memory chips, were the most active issue on the Nasdaq. The shares jumped $26.69, or 46 percent, to $83.38 on volume that exceeded 60 million shares.

Rambus soared after a brokerage upgraded the stock and Toshiba agreed to license the company's patents.

Among members of the CNET tech index, Xerox faltered as Exodus gained.

Xerox fell $4.75, or about 19 percent, to $20.56. The company announced today that it will not meet analysts' expectations for the upcoming quarter.

Exodus rose $10.12, or 11 percent, to $103.25 after favorable comments from some Wall Street analysts.

The Philadelphia semiconductor index rose 25.80 to 1,158.30, led by Rambus. Teradyne posted the largest losses on the index, falling $5.13 to $81.88.

Among other stocks in the news, federal regulators gave their blessing today to the merger of Bell Atlantic and GTE, a union that will create the nation's largest local phone company and wireless provider. GTE fell $2.94 to $66.25, while Bell Atlantic slipped $1.50 to $55.06.

Shares of Covad Communications Group plunged after the company said growth in customers for high-speed Internet access will fall short of targets after an acquisition. The stock sank $6.81, or 27 percent, to $18.44.