Dow gains 8.99 points, closing at record 4,160.80

NEW YORK — NEW YORK -- U.S. stocks, hurt by slumping technology issues, reversed course yesterday after climbing to record highs, but the Dow Jones industrial average still managed to reach its ninth record this month.

Share prices rode a roller coaster, lifted first by Ingersoll-Rand Co.'s $1.34 billion takeover offer for Clark Equipment Co., which drove up heavy machinery stocks, then sent downward under the weight of sinking semiconductor, computer and software issues.


Technology "has certainly been the best leadership around, and with it acting the worst of any day in probably a month, that caused the market to turn around," Edward Laux, senior managing director at Chicago Corp., said.

The Dow Jones industrial average rose 8.99, to a record 4,160.80, after first climbing as much as 46.49 and then retreating 12.11. Caterpillar Inc., Boeing Co. and United Technologies Corp. paced the advance. Advancing common stocks on the New York Stock Exchange outpaced decliners by fewer than 11-to-10 on volume of 386 million shares.


The Standard & Poor's 500 stock index dipped 0.78, to 503.12, after earlier rising 4.25. Drug, telephone, household product and food shares also dropped.

The Nasdaq composite index, loaded with tech stocks, slid 6.98, to 819.16, after gaining as much as 3.58. At its worst, the index was down 8.9. The Russell 2,000 index of small-company stocks dropped 0.37, to 259.90, after first gaining 1.28.

Stocks also suffered from at least two rounds of computer-guided orders to sell stocks, the last of which sliced 30 points from the Dow industrials, said Birinyi Associates of Greenwich, Conn. Sentiment was further damaged by a sale of five-year Treasury notes that suggested flagging demand.

Micron Technology Inc. tumbled $6, to $78.50; Texas Instruments Inc. slipped $3.50, to $94.125; LSI Logic Corp. dropped $1.875, to $55.375; Applied Materials Inc. lost $2.25, to $57; Novellus Systems Inc. declined $2, to $62.50; and Integrated Device Technology Inc. slid $2.375, to $38.375.

Cypress Semiconductor Corp. eased $1, to $29.50; Microsoft Corp. fell $1.375, to $72.25; Cisco Systems Inc. dropped $1.875, to $37.25; Tellabs Inc. shed $4.25, to $58.75; and Parametric Technology Corp. slipped $1.50, to $38.75.

Early in the day, Ingersoll-Rand's unsolicited offer for Clark led investors to bid up prices of other so-called cyclical stocks, or companies whose business is closely tied to swings in the economy, traders said. Clark rejected the offer.

Investors expect earnings to grow this year even as the economy slows, and they foresee companies using their rapidly expanding earnings to make other merger and acquisition offers, traders said.