STOCKS : Dow Falls 34.63 as High-Tech Sector Dives

A big selloff in high-flying technology stocks pounded the stock market Friday, extending losses to a second session following record highs reached earlier in the week. The session was marked by sharply reduced activity on the eve of the long Memorial Day weekend.

The Dow Jones index of 30 industrials dropped 34.63 to 2,820.92, cutting its gain for the week to 1.01 points.

The high-technology sector sank after software maker Adobe Systems Inc. of Mountain View, Calif., stunned Wall Street with an announcement that second-quarter earnings would be far below expectations. Its shares sank 30% on the news.

“Adobe tilted the market downward with the surprise quarterly earnings report,” said Alan Ackerman, senior vice president at Gruntal & Co.

On the broader market, declining issues outnumbered advances by about 7 to 4 in nationwide trading of New York Stock Exchange-listed stocks, with 543 up, 947 down and 507 unchanged.

Many traders got an early start on the three-day holiday weekend, accounting for the light Big Board volume of 120.25 million shares, down from 155.14 million Thursday. The markets will be closed on Monday for Memorial Day.

Adobe, the most active stock in the over-the-counter market, tumbled 15 1/4 to 35 1/4. Other computer and technology issues registered smaller declines on the news.

Apple Computer, a primary Adobe customer, slumped 2 to 40 in OTC trading. Among NYSE-listed technology stocks, International Business Machines dropped 2 1/2 to 116 1/4, Motorola fell 3 to 80 3/4 and Hewlett-Packard lost 5/8 to 47 1/4.

In Tokyo, stocks ended sharply higher, with strong buying sentiment encouraged by the yen rising to its highest level against the dollar in 2 1/2 months. The 225-share Nikkei index jumped 482.13 points, or 1.49%, to close at 32,793.88. The Nikkei rose more than 1,300 points this week.

Stocks fell on the London Stock Exchange in response to early losses on Wall Street. The Financial Times 100-share index lost 11.5 points to close at 2,265.6.

In Frankfurt, West Germany, stocks drifted lower in thin trading. The 30-share DAX index ended 8.63 points lower at 1,823.17.

CREDIT Economic Report Sinks Bond Prices Treasury securities closed lower after a series of reports that spelled bad news for the bond market, including consumer spending figures that were rosier than analysts had expected.

The government’s bellwether 30-year bond, which lost 7/16 point Thursday, fell another 5/8 point, or about $6.25 per $1,000 face amount. Its yield, which rises when prices fall, rose to 8.66% from 8.61% late Thursday.

Trading was extremely light due to the long Memorial Day weekend.

Analysts said the market was affected by the government’s report that consumer spending increased by 0.6% in April, the largest increase since it rose 1.2% in January. The increase was seen as a good indication of future economic growth.

Traders had been expecting an increase of about 0.4%, said Mike Casey, international economist at Maria Ramirez Capital Consultants Inc. Bond prices usually decline on signs of economic improvement because it decreases the likelihood that the Federal Reserve Board will ease interest rates.

The federal funds rate, the interest rate banks charge each other on overnight loans, was quoted at 8.313%, unchanged from late Thursday.

CURRENCY Dollar Plunges Against the Yen The dollar plunged against the yen but otherwise was little changed in foreign exchange as investors regained confidence in the Japanese currency.

The recovery of stock prices in Tokyo helped boost confidence in the yen.

The dollar skidded to 149.40 yen in New York from 151.15 late Thursday. In Tokyo, the dollar fell to a closing 150.05 yen from 151.55 yen, and was quoted at 149.70 yen in London.

COMMODITIES Corn Futures Rise as Rain Continues Too much rain kept corn futures prices growing, and new forecasts called for no change in the soggy conditions that have stalled spring planting in the Midwest.

Other grain and soybean futures also advanced on the Chicago Board of Trade.

On other commodity markets, cocoa futures retreated; livestock and meat futures rose; precious metals and oil futures were mixed.

Corn futures settled 1 cent to 5 cents higher in Chicago, with the contract for delivery in July at $2.84 a bushel. The July contract’s gains totaled 9.25 cents in the three days ending Friday.