Techs Lead Stocks Down; Dow Off 29

Profit-takers hit technology stocks hard once again on Tuesday, sending the broad market lower as well.

The Nasdaq composite index of mostly smaller stocks, loaded with tech names, slumped 16.41 points to 1,220.00, a 1.3% decline.

The blue-chip Dow Jones industrial average fell 29.07 points to 6,061.80, after recovering from a 53-point drop at midday.

Losers outnumbered winners by 26 to 14 on Nasdaq and by 15 to 9 on the New York Stock Exchange, although trading was moderate.

Investors began to chip away at high-flying tech shares last week, despite strong quarterly earnings reports from many of the companies. On Tuesday, some traders used the excuse of a bigger-than-expected loss reported by Digital Equipment to pare tech holdings.

The tech-stock rally of the past two months “happened too quickly,” said Lary Aasheim, an analyst at Core-States Investment Advisers. “The stocks ran up quite a bit, so the companies needed to have a blowout [earnings] quarter just to keep their stocks where they were.”

Microsoft and IBM, both of which reported healthy earnings on Monday, added to concerns by warning of a tougher business environment in the near future.

Stocks were also pressured by a weak bond market, as the Treasury auctioned $18.28 billion of new two-year notes. The average yield on the notes was 5.93%, down from 6.08% at the September auction. But Wall Street dealers who bought the notes from the Treasury said they were having more trouble than expected selling the notes to investors after the auction.

That pushed bond yields up across the board. The 30-year T-bond yield rose to 6.85% from 6.80% on Monday.

The Treasury auctions new five-year notes today.

Meanwhile, the recently strong dollar fell after Market News Service, a financial news agency, said that the Clinton administration might attempt to “talk down” the dollar after the election if the U.S. trade gap with Japan doesn’t narrow further.

The dollar slipped to 112.20 Japanese yen in New York from 112.77 on Monday.

Among Tuesday’s highlights:

* Tech shares skidding lower included Digital, off 5 3/8 to 29; IBM, down 3 1/8 to 127; Microsoft, off 1 1/2 to 132 1/2; Intel, down 2 1/4 to 105 1/2; Sun Microsystems, down 1 3/16 to 59 1/8; Vitesse Semiconductor, down 3 7/8 to 31 3/8; and Xylan, off 4 to 44 7/8.

Also, online services firm CompuServe sank 1 1/4 to 9 1/4 after it forecast a greater-than-expected quarterly loss. And Medaphis, which provides transaction processing for health-care companies, plummeted 6 3/8 to 10 3/8 after it reported a big loss because of restructuring charges.

* Other stocks responding negatively to earnings reports or warnings included brokerage Salomon, down 3 1/4 to 45 3/8; and Chatsworth-based International Remote Imaging, which sank 1 1/2 to 4 1/2 after it forecast a quarterly loss and said it plans to fire about 20% of its staff as part of a restructuring plan aimed at restoring profitability.

* On the plus side, Bristol-Myers jumped 2 7/8 to 106 7/8 after its earnings report; Avery Dennison gained 2 to 62 3/8 on its report.

* In the HMO sector, Oxford Health slumped 3 1/8 to 41 1/4 after research firm Cowen & Co. downgraded the stock. The weakness spread to other HMO stocks.

In foreign trading, Mexico’s Bolsa stock index lost 38.20 points to 3,247.84.