Tech stocks knocked lower

A NEGATIVE forecast on the semiconductor industry from one of its leaders and questions about AOL Time Warner's accounting knocked tech stocks sharply lower in afternoon trade yesterday, while blue chips struggled to find direction.

Around 1.25pm ET, the Nasdaq composite fell 43.55 to 1,246.68. The Dow Jones industrial average lost 49.50 to 8,141.79, a day after the second-biggest one-day point gain in the indicator’s history and not long after it was up 118 points. The Standard & Poor’s 500 index dropped 7.46 to 835.97. Chip and chip-equipment makers traded sharply lower after Taiwan Semiconductor’s chairman said a recovery in demand from the industry’s worst year on record is stalling and that sales this month will fall from a year earlier.

It also reported weaker-than-expected quarterly profits and said it will cut this year’s spending on new equipment to less than $2 billion from a $2.6 billion budget. Market breadth was mixed. On the NYSE, advancers topped decliners 9-to-7 as 1.38bn shares changed hands. On the Nasdaq, losers beat winners nearly 5-to-4 as 1.39 billion shares changed hands.