Interest rate concerns keep lid on stocks
With expectations of rising interest rates looming, the broader markets fall as shares in Microsoft and Intel retreat.
The Dow Jones industrial average fell 66.93 points to close at 10,536.70, while the Standard & Poor's 500 index dropped 12.03 to 1,412.14. The CNET tech index declined 48.91 to 2,821.24.
Although market watchers have pointed to potential rising interest rates as the reason for dragging markets, some speculate a rebound may come after the Federal Reserve meets May 16. Wall Street is expecting an increase in short-term rates by up to half a percentage point, so anything less may spark a rally.
Until then, volume is expected to be light, as it has been for the past eight days.
The Nasdaq composite index, falling for a second consecutive day, dropped 84.37 to 3,585.01. Driving the Nasdaq lower were software giant Microsoft, the fourth-most-active issue, with 30 million shares trading. Chip titan Intel was the sixth-most-active issue, with 21.5 million shares changing hands.
Microsoft fell $2, or nearly 3 percent, to $67.81 The company is preparing to propose restrictions on its own operations as part of its antitrust trial and the judge's orders in that case. Government regulators are asking the judge to break the company into two pieces: one to handle Microsoft's operating system and another for its applications.
Intel declined 69 cents to $116.94. The chipmaker gave up early gains despite a Semiconductor Industry Association report that worldwide sales reached a record high of nearly $15 billion in March--up from $11.18 billion a year ago.
Excite@Home countered the Nasdaq's mood, rising 14 percent to $19.94. The shares, fueled by rumors that cable operator Comcast might buy AT&T's stake in the company, were the second-most-active issue on Nasdaq Stock Market, with 60.2 million shares changing hands.
All 18 sectors tracked by the CNET tech index fell. Semiconductor equipment makers posted the worst performance, dropping about 5.6 percent. Varian Semiconductor Equipment helped pull the sector down with its 11 percent decline to $56.