NEW YORK -- U.S. stocks were mixed yesterday as a late rally in technology stocks contended with concern that a slowing economy may squeeze corporate earnings.
Stocks slid most of the day. Instead of looking forward to a so-called soft landing of slow growth and low inflation, investors began to worry "that an economic slowdown will affect earnings," said Joseph DeMarco, managing director of equity trading at HSBC Asset Management Americas Inc., which manages $4 billion. "All of a sudden, the psychology seems to have switched."
The shift began after an employment report showed the U.S. economy added fewer jobs than expected last month, signaling the Federal Reserve's seven rate increases since last February have slowed the economy. Some 203,000 new jobs were created, short of the 230,000 analysts were predicting.
Late in the day, though, technology stocks reversed a two-day slump, led by semiconductor makers. The chip companies started gaining after Japanese semiconductor makers sought to raise prices to offset the stronger yen, said Arnold Owen, managing director of trading at SoundView Financial Group in Stamford, Conn.
The Dow Jones industrial average fell 12.79 points, to 4,192.62, after chalking up its 16th record high this year on Thursday. Shares of DuPont Co., Chevron Corp. and Eastman Kodak Co. led the decline. Declining issues outnumbered rising stocks, 1,141 to 980, on the New York Stock Exchange.
Shares of DuPont weighed on other chemical issues. The chemical company DuPont on Thursday bought back 24.2 percent of its stock from Seagram Co. for $8.8 billion -- 13 percent less than Thursday's closing price. Yesterday, DuPont shares fell $2.375, to $62.375, after surging 7 percent this week, to a 52-week high. The stock was downgraded to "neutral" from "outperform" at Smith Barney yesterday. Seagram toppled $1.375, to $26.50.
Chemical maker Rohm & Haas Co. slipped 62.5 cents, to $57.625. Dow Chemical Co. was down 75 cents, to $71.875. Bank of Boston Corp. added $1.50, to close at $32.25, after Smith Barney Inc. analyst Henry Dickson raised his opinion on the stock to "buy" from "outperform."
Oil companies fell for a second day amid expectations of weak first-quarter earnings, analysts said.
"The oil companies' earnings have been hurt by a warm winter," said Paul Ting, an oil analyst at Oppenheimer & Co. "Poor refinery margins in the industry are going to translate into lackluster earnings."
The declines worsened as analysts lowered their ratings on several oil stocks, including Mobil Corp. and Amoco Corp. Analysts are concerned that companies that built refineries to accommodate new regulations for reformulated gas in the United States may suffer as more states decide not to adopt the regulations.
Chevron's shares fell 75 cents, to $45.50, and Mobil Corp.'s stock slid 62.5 cents, to $89.50.
Shares were also pushed down as bond yields jumped, traders said. Yields on 30-year U.S. Treasury bonds rose to 7.39 percent, after stooping to a nine-month low of 7.30 percent earlier. Higher rates make bonds more attractive to investors compared to stocks.
Among broader market measures, the Standard & Poor's 500 stock index gained 0.34, to 506.42, enough to score its third consecutive high this week. Gains in telephone companies, chip makers and software developers offset losses in chemical, oil and electrical equipment shares.
The Nasdaq combined composite index, laden with technology issues, gained 0.89, to 814.69, led by semiconductor shares.
Trading volume on the Big Board fell to 314.8 million shares from 320.4 million, and below 331.77 million average trading volume since the beginning of the year.
Shares of semiconductor makers jumped on news of Japanese chip price increases.
Intel Corp.'s stock, which had fallen 3.4 percent since its 52-week high Monday, jumped $1.625, to $87.125; Micron Technology Inc. rose $1.375, to $76.25; and semiconductor-equipment maker Applied Materials Inc. increased $1.75, to $57.
Semiconductors pulled up other computer shares, which languished Thursday on concern computer sales are slowing. Oracle Systems Corp. rose $1.25, to $30.625, and Computer Associates International Inc. jumped $1, to $59.50.