Tech stocks pull Wall Street down

The plunging technology sector pulled the rest of Wall Street lower today, giving the stock market a dismal end to a difficult week and the Nasdaq composite index its biggest weekly decline in two-and-a-half years.

Blue chip stocks surrendered moderate gains as fears of higher interest rates again prompted investors to overlook strong earnings – this time from ChevronTexaco Corp and Procter & Gamble Co.

Selling in tech stocks started early in the day and intensified as the session wore on.

Jim Russell, director of core equity strategy for Fifth-Third Asset Management in Cincinnati, attributed the slide to investors who appeared to be “cashing in a few chips where they’ve made the most money”.

Bob Dickey, managing director of technical analysis at RBC Dain Rauscher in Minneapolis, said the market, following a now familiar trading pattern, was moving in fits and starts, “but the bottom line is we’re still in a trading range we’ve been in for four months and could be in for another four months”.

He added that it was almost as if “the doldrums of summer have set in early”.

The Nasdaq suffered its fifth consecutive loss, tumbling 38.63, or 2%, to 1,920.15, according to preliminary calculations.

The drop gave the Nasdaq a 6.4% decline for the week, its worst performance since a nearly 6.5% slide in the week ended October 18, near the lowest point in the bear market.

The Dow Jones industrials closed down 46.70, or 0.5% , at 10,225.57, while the Standard & Poor’s 500 index finished down 6.59, or 0.6%, at 1,107.30.

For the week, the Dow lost 2.4% and the S&P slipped 2.9%.

Blue chip stocks have escaped some selling because they are seen as relatively stalwart compared to the growth issues in the Nasdaq.