Tech Stocks Lead Decline in Light Trading

The U.S. stock market closed out a down week overall with more losses on Friday, raising concerns that investors’ interest in stocks is flagging.

Tech stocks led the pullback, and some drug stocks also fell, with Pfizer sliding on news that six men taking the anti-impotence pill Viagra had died, possibly from drug interactions.

Meanwhile, most Asian markets pulled back after rallying on Thursday on news of Indonesian President Suharto’s resignation.

On Wall Street, the Dow Jones industrials eased 17.93 points to 9,114.44 as trading volume dried up ahead of the long holiday weekend.

Just 440 million shares changed hands on the New York Stock Exchange, the second-lowest total so far this year.

But as was the case all week, the Dow’s relative strength masked much more serious weakness in the broad market.

Losers outnumbered winners by 18 to 11 on the NYSE on Friday, and by 24 to 17 on Nasdaq.

The tech-heavy Nasdaq composite index slid 15.99 points, or 0.9%, to 1,805.00. For the week the Nasdaq index slumped 2.3%, even though the Dow inched up 0.2% and the blue-chip Standard & Poor’s 500 added 0.2% as well.

Also for the week, 1,957 NYSE issues fell in price while 1,359 rose.

The Nasdaq index now is off 6.6% from its record high of 1,931.83 reached during trading on April 22. The Dow is off just 1.6% from its intraday peak of 9,261.91 reached on May 4.

“The long-term trend is still up,” said Don Selkin, market strategist at Joseph Gunnar & Co. “But there has been a tremendous amount of internal weakness in the market. More stocks have been going down than up.”

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A host of concerns are nagging at investors, analysts say. For one, Asia’s economic mess shows no sign of being solved quickly, even with Suharto’s departure. Japan’s Economic Planning Agency warned Friday that the Japanese economy is stagnant and that conditions are becoming more difficult.

In South Korea, the government said one out of every 15 eligible workers was jobless last month, a 6.7% unemployment rate. In the first quarter South Korea’s economy contracted at a 3.8% annualized rate, the worst performance in 17 years.

South Korea’s main stock index fell 2.4% on Friday, though it inched up 0.2% for the week. The Japanese market lost 0.3% Friday, though for the week it rebounded 3.7%. In Singapore stocks were down 0.5% on Friday, and in Hong Kong they fell 1.2%.

As Asian countries attempt to export their way out of trouble, the growing tide of cheap Asian imports threatens to hurt profit margins of American companies that compete, analysts say. In addition, Asian countries’ appetite for U.S. exports is waning, as the March U.S. trade deficit report last week indicated.

That may mean more trouble for U.S. technology companies, many of which posted disappointing earnings growth in the first quarter because of computer price wars and weaker exports.

The Morgan Stanley tech-stock index fell 1.3% on Friday and is down 6.3% from its record high reached May 11.

With the second-quarter reporting season more than a month away, some companies are already starting to announce that profits may disappoint Wall Street.

On Friday, Manugistics Group tumbled $18.63 to $29.25 after the maker of manufacturing software said it would lose money this quarter because of sluggish sales.

Analysts say Wall Street still is supported by relatively low interest rates and by the extraordinary pace of merger activity. On Friday bond yields ended mostly unchanged, with the 30-year Treasury bond yield at 5.90%, down from 5.97% a week ago.

But the stock market’s internal weakness could portend a steeper drop ahead, many analysts say.

Among Friday’s highlights:

* Tech stock losers included Apple, down $1 to $27.88; IBM, down $1.69 to $121.94; Dell, off $1.44 to $85.63; Autodesk, down $2.50 to $42; Peoplesoft, down $2.25 to $42.13; and Xylan, down $1.31 to $25.44.

Seagate Technology fell $1.13 to $22.75 after the maker of computer disk drives said it will spend less in the fiscal year ending June 30 than it budgeted as it strengthens its balance sheet.

* Pfizer sank $3.69 to $105.44 after the Food and Drug Administration said it was probing the deaths of Viagra-taking patients. Pfizer said it is warning paramedics and emergency room physicians not to treat patients on its impotence pill Viagra with nitroglycerin, a heart drug.

Other drug stocks sliding included Lilly, down $1.06 to $66, and Merck, off 69 cents to $118.

* Essex International, a maker of electrical wire and cable, said reduced prices for building wire caused by increased competition will trim second-quarter earnings by 25% to 30%. Its shares plunged $8.25 to $24.38.

* U.S. Surgical jumped $2.31 to $39.25 on speculation that the surgical products maker will be acquired. Possible buyers include Tyco International Inc., a manufacturing and service company, and Medtronic Inc., best known as a maker of heart pacemakers and valves.

* Sprint rose $2 to $73.69 on reports the telecommunications company and three cable TV partners plan to sell about a 10% stake in Sprint PCS, their wireless service, to the public for $1 billion.

In currency markets, the dollar gained against the yen after Japan’s central bank released the minutes of an April 9 meeting that suggested another cut in interest rates may be warranted. The dollar rose to 135.88 yen in New York from 134.78 Thursday.