NEW YORK, Sept. 3 -- Technology stocks sold off on Friday after computer chipmaker Intel cut its revenue forecast, spooking investors already nervous about the strength of consumer and business spending.
The Nasdaq composite index, dominated by technology shares, slid 28.95 points, or 1.6 percent, to close at 1844.48. The Nasdaq is down 7.9 percent for the year after turning in a 50 percent gain in 2003.
The broader market fared somewhat better Friday after a government report showed the economy generated 144,000 non-farm payroll jobs in August, a modest number but far better than the 73,000 jobs created in July. The number caused some Wall Street analysts to suggest that a "soft patch" the economy hit over the summer may be over.
The Dow Jones industrial average declined 30.08 points on Friday to close at 10,260.20. The Standard & Poor's 500-stock index slid 4.68 points to close at 1113.63.
While the employment figure provided some reassurance, Intel's revenue warning unnerved technology investors who remain unconvinced that the economy is gaining enough strength to drive corporate and consumer spending.
"We still own Intel shares, though we may not in an hour or so," Michael Obuchowski, money manager at Altanes Investments in New York, said Friday morning.
"The softness in demand for Intel was global and across all categories of products," he said. "The big question is, was this just the result of the [summer] slowdown? Or are things really significantly worse than we expected? Right now we don't have an answer."
Intel reduced its revenue forecast on Thursday after the markets closed, saying demand for personal computers and mobile phones had dropped worldwide. The announcement stoked fear that rising oil prices and soft hiring figures have significantly cut into consumer spending, especially on technology.
"Cleary this was an indication that the slowdown in technology continues," said Stephen J. Massocca, head of stock trading at Pacific Growth Equities.
Intel shares plunged $1.58, or 7.3 percent, on Friday to close at $20.05. Advanced Micro Devices, Intel's chief competitor in the personal computer chip market, dropped 77 cents, or 6.6 percent, to close at $10.90 a share. Chipmaker Altera, which also reduced its earnings forecast, sank $1.25, or 6.6 percent, to $17.81 a share.
