NEW YORK -- U.S. stocks, weighed down by Sears, Roebuck and Co. and Gap Inc., fell after a string of disappointing retail sales reports lessened prospects that Christmas sales will revive retailers and with them, the economy.
The Dow Jones industrial average tumbled 31.07 points, erasing a 13.37-point advance to close at 5,074.49, snapping six consecutive days of records. A wave of computer-guided sell orders in the last hour of trading contributed to the loss.
Declines in telephone, oil and semiconductor shares pushed the Standard & Poor's 500 index down 2.27, to 605.37, breaking three days of all-time highs.
The Nasdaq composite index managed a 1.63 gain, to 1,059.20, propelled by gains in St. Jude Medical Inc., ADC Telecommunications Inc. and U.S. Robotics Corp. Losses in Intel Corp., Microsoft Corp. and Oracle Corp. shares tempered the advance.
It was the third time this week that computer-guided orders moved the market substantially in the last hour of trading.
The Dow industrials are up 33 percent and set 65 records this year. In November, the average jumped 319 points, or 6.7 percent -- the best monthly gain this year.
Shares of Walt Disney Co., Exxon Corp., Eastman Kodak Co. and Philip Morris Cos. were the Dow's biggest losers.
Earlier yesterday, gains in Merck & Co. led drug stocks higher and boosted the market. The stock rose $1, to $61.875, after Gruntal & Co. analyst David F. Saks raised his two-year price target to $78 a share from $71.
Advancers outpaced decliners. Some 1,371 shares rose and 1029 declined on the New York Stock Exchange.
Among broad market indexes, the Russell 2,000 index of small capitalization stocks rose 1.86 to 308.58; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq stock exchanges, fell 3.94 to 5969.99; the Amex market value index rose 4.34, to 537.37; and the S&P; 400 midcap index rose 1.39, to a record 217.3.
Evidence of sluggish clothing sales before Christmas weighed on retailers, even though analysts expected consumers to hold back this season.
Gap shares led a decline, plunging $3.125, to $45.25, after the women's clothing company said its same-store sales rose just 1 percent. The results came three weeks after the company posted a 25 percent increase in third-quarter earnings, exceeding analysts' estimates.
Sunglass Hut International shares fell $1.125, to $21, after it said same-store sales rose a worse-than-expected 4.1 percent.
Even Sears Roebuck, which beat analysts' expectations with its 5.1 percent sales increase, dropped 87.5 cents, to $39.375.
Chip makers Micron Technology Inc. and Texas Instruments Inc. fell after Goldman, Sachs & Co. trimmed its earnings estimates for the companies. The lowered estimates spurred concern that high-flying technology companies could fall short of Wall Street's forecasts next quarter.
Micron shares slipped 62.5 cents, to $54.25, after losing as much as $2.625. Texas Instruments fell $1.625, to $57.875.
Goldman analyst Rajiv Chaudri cut his Micron estimates for fiscal 1996 by 75 cents, or 9.6 percent, to $7 a share and Texas Instrument by 50 cents, or 5.5 percent, to $8.50. The analyst couldn't be reached for comment.
Among other computer-related stocks, Intel fell $2.125, to $60.875; Microsoft shares weakened $2.625, to $87.125; and Oracle shares plunged $1.375, to $45.375.
The yield on the benchmark 30-year bond fell 6 basis points, to 6.13 percent, its lowest level in two years.
St. Jude Medical Inc. gained $2.75, to $39.50, after it got approval from the Food and Drug Administration for its rotatable heart valve.
Shares of 3DO Co. were the most actively traded, rising $1.125, to $11.125, after Time Warner Inc. sold a 2.83 million-share block of the computer company's stock.