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Tech stocks drive Nasdaq, Dow lower

Interest rate worries and concern regarding some large acquisitions combine to drive stocks lower, led by tech shares.

2 min read
Interest rate worries and concern regarding some large acquisitions combined to drive stocks lower today, led by tech shares.

A day after the Federal Reserve hiked interest rates to cool the economy, the Nasdaq composite index fell 72.61 to close at 3,644.96. The Standard & Poor's 500 index dropped 18.24 to 1,447.80.

The Dow Jones industrial average fell 164.83 to 10,769.74, led by Hewlett-Packard, which released earnings yesterday after the markets closed.

At the end of regular trading, Intel had edged up $1.31 to $123.19. Microsoft fell $1.81 to $67.69. Intel announced a 2-for-1 stock split.

Of the 18 sectors tracked, nearly every sector posted losses. PC hardware and wireless companies posted the sharpest drops, falling 34 percent and 12 percent, respectively. Semiconductor makers and telecommuncations equipment companies were the day's only gainers, climbing 6 percent and 3 percent, respectively.

The CNET tech index lost 46.68 to 2,705.69, dragged by shares of Lycos and CMGI.

Losers bathed the index in the red, with 77 of the 99 stocks in the index falling, 21 rising and one remaining unchanged.

Lycos was the second-highest loser on the Nasdaq Stock Market in percentage terms. Shares of the Internet portal fell $15.03, or 21 percent, to $57.59 on a volume of 33 million shares, nearly 10 times the stock's daily average. Investors have become cautious about the company's proposed merger with Terra Networks.

Terra fell $6.56, or 12 percent, to $47. CMGI, which owns a 15 percent stake in Lycos, fell $4.44 to $60.06.

On the upside, eToys inched slightly higher after some favorable analyst comments. It rose $1.13, or 18 percent, to $7.38 on a volume of 6 million shares, more than three times the stock's daily average. Shares of the Internet toy retailer have traded in a range of $86 to $4.50 over the past 52 weeks.

The Philadelphia semiconductor index fell 18.95 to 1,027.73, led by chipmaker Linear Technology, which lost $2.44 to $54.19.

AT&T Wireless unveiled free mobile phone-based Internet access when customers purchase one of two phone models, escalating the emerging battle for wireless Net access customers. The company's shares finished unchanged at $29, while shares of competitor Nextel fell $8.69 to $100.