NEW YORK -- U.S. stocks fell yesterday, ending a three-day climb to record highs, as investors grew concerned that gains in shares of computer-related companies are leveling off.
The decline was sparked early yesterday after Goldman, Sachs & Co. removed technology benchmark Microsoft Corp. from the list of its top recommendations.
Computer-guided selling helped push the Dow Jones industrial average to 4,814.01, down 11.56 from Friday's record. The decline came amid a slew of corporate combinations and fueled gains in shares of companies being acquired, including Networth Inc., Federal Paper Board Co. and Pratt & Lambert United Inc.
Federal Paper Board soared $6.50, to $52, after International Paper Co., the world's largest forest-products company, said it hadagreed to buy the company for $2.59 billion in cash and stock. International Paper shares dropped $1, to $36.125.
Procter & Gamble Co. was the biggest decliner in the Dow industrials. Its shares slipped $1.25, to $82, after Scott Paper Co. sued the company for its advertisements in Canada comparing its Bounty paper towels with Scott Paper's competing product.
AlliedSignal Inc. fell $1.125, to $42.50, and International Business Machines Corp. fell $1, to $100.50, helping lead the Dow industrials lower.
A continued rally in airline shares sent the Dow Jones transportation average to a record 2,010.45, eclipsing the previous high of 2,000.39 Sept. 18. The Standard & Poor's 500 stock index, which represents 74 percent of the value of all U.S. stocks, fell $2.11, to $588.46. Semiconductor, computer and electric utility issues weighed on the market. Auto, retail and gold stocks gained.
The technology-laden Nasdaq composite index fell 3.52, to 1,062.14, led by declines in Microsoft, Intel Corp. and Oracle Corp.
Among other indexes, the Russell 2000 index of small stocks eked out a 0.15 gain, to reach 302.94, its sixth straight advance. The Wilshire 5000 index slid 11.73, to 5,830.16, and the American Stock Exchange market value index fell 0.5, to 528.61.
Some 1,071 stocks fell and 1,162 rose on the New York Stock Exchange.
About 309.11 million shares changed hands, compared with six-month daily average volume of 346.55 and down from 344.36 million Friday.
Microsoft's stock dropped $2.125, to $97.375, after Goldman analyst Richard Sherlund tempered his optimistic outlook on the shares. Before yesterday, the maker of Windows 95 had risen 63 percent this year as software sales soared and helped lead a rally in computer-related shares that propelled the Dow industrials to two consecutive records last week.
Circuit City Stores Inc. lost $2.25, to close at $30.50, after the retailer reported same-store sales fell 1 percent from a year ago.