Stocks tumbled Wednesday as worries about the earnings of Intel, the world's biggest semiconductor maker, sent investors scrambling for the exits.
The Dow Jones industrial average ended down 87.44 points at 8,803.80 after falling 100 points in the heat of a late sell-off.
In the broad market, declining issues led advances 1,544 to 1,410 on moderate volume of 584.48 million shares on the New York Stock Exchange.
The technology-laced Nasdaq composite index fell 19.48 points to 1,742.31 after a Wall Street brokerage house revised downward its earnings forecast for Intel.
"The techs have had a major correction, but the bounce today was lackluster and Intel gave people an excuse to sell," said Scott Bleier, chief investment strategist at Prime Charter Ltd.
Bonds were little changed as investors were reluctant to buy before Friday's government report on May employment. The yield of the benchmark 30-year Treasury bond fell slightly to 5.78%, down from 5.79%.
Friday's report on payroll and wage levels--two major forces behind inflation--will provide some clues on whether the Federal Reserve Board might perceive a need to slow the economy with higher interest rates.
On Wall Street, Hambrecht & Quist cut its second-quarter and full-year 1998 earnings estimates for Intel, which slumped $3.31 to $65.94 after hitting a 52-week low at $65.66.
Bleier said Hambrecht's move was seen as coming even before Intel's own recent earnings-warning announcement.
Computerized sell programs greased the late-session slide.
"There is a valuation reevaluation underway in technology as the price of components continues to plummet with no more business in Asia, and with the traditional summer slowdown ahead," Bleier said. "I don't think the correction is over until the Dow hits 8,600 points."
The concern is that the weakness of Asian economies will cut sharply into the earnings of technology companies.
The Pacific Rim countries are viewed as much more unstable following the latest collapse of financial markets.
Asian markets had rebounded over the last seven months on optimism that things would get better. Now, people are realizing that there is no instant solution to Asia's problems.
Profits in the semiconductor sector, dominated by Intel, are expected to be hit hardest of all.
Intel said Wednesday that it planned no statement on its second-quarter earnings, and that it had not changed its guidance to analysts on earnings.
Dell Computer slid $2.38 to $80.25 after shedding a gain of nearly $3.
Likewise, IBM fell $1.69 to $113.88 as one of the Dow's weakest components.
For the most part, however, the day's losses were fairly well distributed among the Dow 30: Merck fell $2.06 to $112.56 and J.P. Morgan fell $2 to $122.31 as the only two components to lose at least $2.
The Standard & Poor's composite index of 500 stocks fell 10.49 points to 1,082.73. The American Stock Exchange index was off 1.82 points to 704.48.
The NYSE composite index of all listed common stocks was off 3.92 points at 561.43. The average share was down 32 cents.
The Wilshire Associates equity index--the market value of NYSE, American and Nasdaq issues--was 10,225.568, down 75.197 points, or 0.73%.
Overseas, Tokyo's Nikkei stock average fell 1.3%, Frankfurt's DAX index rose 0.6% and London's FTSE-100 rose 1%.
Among Wednesday's market highlights:
* Allied Group rose $3.31 to $46.19. The insurer and Nationwide Mutual Insurance said they were in merger talks that could lead to a friendly $1.65-billion deal.
* Takeover candidate DSC Communications, which makes digital switching and transmission products for telecommunications networks, gained 88 cents to $19.69. Bay Networks, a maker of networking equipment and another takeover candidate, rose 19 cents to $27.94.
* Komag slipped $1.19 to $8 after the disk drive component maker said it would lay off 10% of its work force and post a quarterly loss of about $58 million.
Market Roundup, D8