US stocks fall

Technology shares dropped sharply on Wall Street today amid rumours that Cisco Systems will be the next company to warn of weaker profits.

Blue chips also fell, compounding losses run up on Monday after IBM reduced its earnings outlook.

The Dow Jones industrial average closed down 40.41, or 0.4%, at 10,208.67.

On Monday, the blue chip index recovered from a 150-point dip caused by IBM’s news and closed just 22.56 lower.

The broader market recorded steeper losses. The tech-dominated Nasdaq composite index fell 43.36, or 2.4%, to 1,742.51, having advanced 15.84 on Monday despite IBM’s warning. The Standard & Poor’s 500 index declined 7.50, or 0.7 percent, to 1,117.79.

Cisco Systems fell dlrs 1.36 to dlrs 14.82 after RBC Capital Markets lowered its third-quarter estimates on the networking stock, citing a continued slump in capital spending on information technology.

Later, rumours spread on Wall Street that Cisco would be the next big tech company to warn about profits.

Other tech losers included Microsoft, which fell dlrs 2.35 to dlrs 54.87, and Intel, which was down dlrs 1.47 to dlrs 28.46. Yahoo! stumbled 38 cents to dlrs 18.46 ahead of its earnings due out tomorrow.

But Dow industrial IBM rose 33 cents to dlrs 87.74, a meagre recovery from Monday’s dlrs 9.84 loss.

Among today’s winners, Wendy’s gained dlrs 1.36 to dlrs 37.30 after raising its fiscal 2002 earnings estimate. Lehman Brothers, Goldman Sachs and Credit Suisse First Boston also raised various earnings estimates for the fast-food company.

Positive growth prospects boosted Wal-Mart, up 32 cents at dlrs 60.10. Salomon Smith Barney said it expects the retailer to record 13% profit growth over the next three to five years. The brokerage initiated coverage of the retailing stock with a ‘‘buy’’ rating.

Advancing issues outnumbered decliners 17 to 14 on the New York Stock Exchange. Volume totalled 1.21 million shares, ahead of Monday’s 1.10 billion.

The Russell 2000 index, the barometer of smaller company stocks, finished Tuesday unchanged at 503.01.