NEW YORK -- U.S. stocks fell yesterday, led by a slump in shares of semiconductor companies amid evidence of waning demand for their products.
The decline ended six straight days of records for the Standard & Poor's 500 and Nasdaq composite indexes.
"It's ultimately earnings concern," said Todd Clark, senior trader at Rodman & Renshaw. "The book-to-bill was really the key to yesterday." The book-to-bill ratio, an industry gauge, showed demand for semiconductors slipped last month to its lowest point in at least 10 years.
The Dow Jones industrial average rebounded in the last few minutes of trading and managed to close 1.08 higher, at 5,601.23, its seventh straight high. That came after a series of computer-guided "sell" orders had sparked a decline of more than 30 points in the Dow industrials.
Declining stocks outnumbered advancers 1,226 to 1,090 on the New York Stock Exchange, where 441.5 million shares changed hands compared with 397.8 million Monday.
The Standard & Poor's 500 index slid 0.94 to 660.51. Declines in regional telephone, computer and chip stocks outweighed gains in oil, insurance and bank shares.
The Nasdaq index fell 8.16 to 1,087.22. Chip makers Intel Corp. and Applied Materials Inc. fell the most.
Among other indexes that ended their record streaks, the Russell index 2,000 fell 1.59 to 319.82; the Wilshire 5,000 index lost 13.59 to 6412.28; and the American Stock Exchange market value index dropped 1.84 to 560.62.
After the close of trading yesterday, the Semiconductor Industry Association said the book-to-bill ratio declined to 0.93 in January from a revised 1.12 in December. That means chip makers received only $93 in new orders for each $100 of products shipped last month.
Concern that slowing demand will hurt profits pushed Intel shares down $1.109375 to $57.125. Applied Materials fell $1.625 to $38.375.
Chip maker Micron Technology Inc. fell $1.25 after it was downgraded by Duff & Phelps Investment Research and Pacific Crest Securities, then rebounded to $37.75, up 75 cents.
Morgan Stanley downgraded Compaq Computer Corp. and Dell Computer Corp. to "neutral" from "outperform." Dell dropped $2.6875 to $31.25 and Compaq skidded $1.25 to $50. IBM lost $1.625 to $113.625.
Office Depot Inc. said fourth-quarter earnings rose 11 percent, less than what analysts expected. The stock fell $1 to $19.25.
Banks gained. Citicorp rose 50 cents to $76; BankAmerica Corp. rose 37.5 cents to $70.75; and Banc One Corp. climbed 62.5 cents to $39.50.
Shares of local telephone companies slipped after surging Monday.
Merrill Lynch & Co. lowered its long-term opinion on BellSouth Corp. and U.S. West Inc. to "above average" from "buy." BellSouth lost $1 to $44.50 and U.S. West fell $1.25 to $35.75.
Ameritech Corp. slumped $1.50 to $64.875 and Bell Atlantic Corp. skidded 87.5 cents to $73.50.
Teledyne Inc. rose $1 to $28 after WHX Corp. sweetened its buyout offer to $1.67 billion, or $30 a share. The maker of aviation electronics, among other things, has spurned two offers from WHX since November 1994.
United Technologies jumped $2.875 to $105.75. The maker of Carrier air conditioners and Otis elevators said it would use its free cash to acquire companies and buy back shares during the next couple years, the Wall Street Journal reported.
Cigna Corp. jumped $3 to $121.625 after the Philadelphia-based insurer announced that its earnings rose 51 percent, exceeding analysts' forecasts.
International Paper Co. dropped 75 cents to $39.75 after the paper company said it will take a $500 million charge against its first-quarter earnings for costs of closing several plants and boosting the profitability of its imaging-products business.