US stocks retreat

Wall Street tried to extend its huge rally today but failed amid concerns about a slump in the semiconductor industry. Another accounting investigation, this time at AOL Time Warner, also reminded investors of their misgivings about corporate ethics.

The Dow Jones industrials fluctuated widely, while the tech sector was lower for the entire session, and the Nasdaq composite index gave up most of Wednesday’s gains.

The downturn was not surprising in a market still uneasy after nine weeks of declines that claimed a quarter of the market’s value. And analysts were encouraged that the market did not fall harder.

‘‘After such a huge rally, you have to expect the market to vacillate over the next few days. The reason for that is the question of capitulation is still unanswered whether we have reached the bottom or not,’’ said Peter Cardillo, president and chief strategist of Global Partner Securities Inc.

The Dow closed down 4.98, or 0.1%, at 8,186.31.

On Wednesday, the Dow rose nearly 490 points following the arrest of Adelphia Communications executives for allegedly stealing from the cable TV company and an agreement between House and Senate negotiators on legislation to create tougher penalties for corporate fraud.

The broader market was mixed today. The Nasdaq composite index fell 50.11, or 3.9%, to 1,240.12, after a 61-point surge on Wednesday.

The Standard & Poor’s 500 index fell 4.76, or 0.6%, to 838.67, following a 45-point gain the previous session.

Many analysts believe Wednesday’s rally was the kind of snapback the market needed after more than two months of declines that saw most stocks drop to levels not seen since 1997.

‘‘We have had a huge bounce, but it is going to take some time for the market to work through this tremendous volatility,’’ said Scott Bleier, president of Hybridinvestors.com.

Bleier said he expected the market to endure more downturns but said most of the damage was over, and that the market had greater upside potential.

‘‘It might be a time when investors can invest in stocks again because they are reasonably priced, rather than buy stocks simply because they are going up. That has been difficult to do, because stocks were so expensive.’’

Today, AOL fell dlrs 1.84 to dlrs 9.56, after acknowledging that federal regulators are looking into how it accounted for several transactions that were reported last week.

The tech sector was hurt by chip stocks after Taiwan Semiconductor said while second-quarter profits rose sharply, it expects weaker demand in the third quarter. Taiwan Semiconductor fell dlrs 2.16 to dlrs 8.98.

Chip maker Intel fell 85 cents to dlrs 17.85, and chip equipment maker Applied Material tumbled dlrs 1.96 to dlrs 14.59.

Investors were disheartened by a drop in orders to US factories for big-ticket items. The Commerce Department reported that orders fell 3.8% in June, well short of the 0.5% increase that analysts were expecting.

Major manufacturers traded lower on the economic news. General Motors fell 95 cents to dlrs 43.80, and Whirlpool tumbled 22 cents to dlrs 55.03.

But better-than-expected earnings created some winners. Bausch & Lomb climbed dlrs 2.73 to dlrs 31.69 after reporting earnings that were 5 cents a share higher than analysts were anticipating.

Decliners led advancers more than 8 to 7 on the New York Stock Exchange. Volume was moderate. On the Nasdaq, decliners outnumbered advancers nearly 6 to 5.

The Russell 2000 index, which tracks smaller company stocks, fell 0.50, or 0.2%, to 378.06.