Stocks End Lower in Late Sell-Off

A late-day sell-off in technology issues before the release of Hewlett-Packard Co.’s results led Wall Street lower Thursday, wiping out gains fueled by solid earnings and economic news.

The Dow Jones industrial average and Standard & Poor’s 500 index were flirting with 2 1/2-year highs before heavy selling in the last hour of trading sent prices skidding. By the end of the session, declining issues outpaced advancers by more than 3 to 2 on the New York Stock Exchange.

“It could be programmed trades executing when stocks hit those higher levels, or just some profit taking,” said Kevin Caron, market strategist for Ryan, Beck & Co.

The Dow closed down 7.26 points, or 0.1%, at 10,664.73. The blue-chip index had risen more than 70 points earlier, surpassing their 2 1/2-year high of 10,737.70 reached Feb. 11.

The S&P; 500 was down 4.76 points, or 0.4%, at 1,147.06.

Broader stock indicators also dropped, with smaller stocks and technology shares slumping as investors moved to more defensive positions. The tech-dominated Nasdaq lost 30.51 points, or 1.5%, to 2,045.96.

U.S. Treasuries made an about-face and climbed into positive territory after data showed regional U.S. manufacturing did not flourish as much as expected in early February. That news offset upbeat comments from some Federal Reserve officials.

“Basically, the market got a lot of very important numbers in the last week or two and it’s going to be kind of quiet until [traders] get some more major information that changes their view that the Fed will be on hold for a while,” said Joseph Shatz, government bond strategist at Merrill Lynch.

The benchmark 10-year Treasury rose in price, while its yield slipped to 4.03% from 4.05% on Wednesday.

The dollar took a breather after Wednesday’s gains against major currencies. In New York trading, the euro was at $1.269, little changed from Wednesday. The dollar was up slightly against the yen.

Hewlett-Packard, a bellwether for the tech sector, announced its quarterly earnings after the close of trading, meeting analysts’ estimates of 35 cents a share. The shares had closed up 35 cents at $23.86, but shed 26 cents to $23.60 after hours.

The day’s economic news was surprisingly good. Unemployment claims fell by a seasonally adjusted 24,000 to 344,000 for the week ended Feb. 14, the lowest level since Jan. 24, giving investors hope that corporate finances were secure enough to prevent more large-scale layoffs.

“This is definitely a welcome sign,” Caron said. “It’s just one week and one data point, but the overall trend is deceleration in jobless claims and a rise in new jobs, and this fits in with that.”

Investors also were cheered by a larger-than-expected rise in the index of leading economic indicators. The index rose 0.5% in January, 0.2 percentage point higher than most estimates.

Among Thursday’s highlights:

* Wal-Mart Stores jumped $1.18 to $58.38 after reporting strong fourth-quarter earnings, as expected, and indicating that the first quarter would be stronger than previously expected. Target beat Wall Street expectations, but fell 58 cents to $41.71.

* Shares in Burbank’s Walt Disney rose 29 cents to $27. Comcast, which is trying to take control of Disney, saw its shares fall 55 cents to $30.25.

* Tech issues shed their earlier gains, which were fueled by strong earnings from Applied Materials, the chip manufacturing equipment maker, and a bright outlook for Irvine’s Broadcom, which makes microchips for digital television boxes and other consumer items.

Applied Materials lost 18 cents to $22.13 after rising as high as $24. Broadcom, which adjusted its quarterly revenue estimates upward after Wednesday’s session, was down 90 cents at $41.56 after rising to $44.

Also in the sector, Intel dropped 71 cents to $29.89 and Cisco Systems fell 41 cents to $23.68.

Market Roundup, C6-7