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MARKET CLOSE: Earnings fears take down techs

Technology stocks retreated Monday on earnings worries spurred by Goldman Sachs' lowering of revenue estimates for IBM (NYSE: IBM).

The tech-heavy Nasdaq Composite Index dropped 82.06 to 3,896.35. The S&P 500 fell 5.24 to 1,489.26. The Dow Jones Industrial Average slid 25.16 to 11,195.49, with its IBM and Hewlett-Packard (NYSE: HWP) among the blue chip index's biggest losers.

Inter@ctive Week's @100 Index yielded 76.39 to 4,269.71.

"There is concern about how earnings and demand will play out in technology in the second half of the year," said Bill Meehan, chief market analyst at Cantor Fitzgerald.

Shares of IBM dipped 4.75 to 124.75 after Goldman Sachs cut estimates for fourth quarter revenue and earnings growth. Goldman analyst Laura Conigliaro cited currency concerns for IBM, which gets much of its business from Europe.

Diamond Technology Partners (Nasdaq: DTPI), which retreated 1.375 to 71.5, said it would buy Cluster Consulting, a European management consulting firm specializing in wireless technology, for about $930 million.

Hewlett-Packard, tumbling 7.375 to 113.625, is in talks to acquire the consulting arm of PricewaterhouseCoopers in a cash and stock deal worth $17 billion to $18 billion. The deal would lower earnings per share slighly in fiscal 2001, HP said.

Commerce One (Nasdaq: CMRC) rose 3.75 to 75.125 as one of the few gainers among the most active U.S. issues, following federal approval of the Covisint online trading exchange for parts used by the Big Three U.S. automakers. Another partner in the exchange, Oracle (Nasdaq: ORCL), shed 3.125 to 83.4375.

Covad Communications (Nasdaq: COVD) advanced 2 to 20.375 on volume of almost 28 million shares. The DSL service provider said it had signed a $600 million deal with SBC Communications, Inc. for six years.

Cabletron Systems (NYSE: CS), down 0.6875 to 34.375, has acquired Baltimore-based Network Security Wizards on behalf of its Enterasys Network division.

Caminus Corp. (Nasdaq: CAMZ) shot up 3.4375 to 20.125 after Banc of America said it had raised its rating on the stock to "strong buy" from "buy."

Iomega Corp. (NYSE: IOM) rose 0.5 to 4.875 after its board of directors authorized the repurchase of up to $150 million in stock.

Saudi Arabia's billionaire Prince Alwaleed bin Talal said on Monday he would buy a forward contract in common stock from the founder of Priceline.com (Nasdaq: PCLN), up 0.75 to 26.5, for an aggregate purchase price of $50 million.

Among other leading tech issues: Intel (Nasdaq: INTC) slid 0.6875 to 64.6875, Microsoft (Nasdaq: MSFT) fell 0.5 to 68.8125 and Cisco (Nasdaq: CSCO) dropped 2.6875 to 61.1875.