U.S. stocks fell as a lower profit forecast from Jabil Circuit, a maker of electronics for other companies, led to losses for computer-related companies such as Cisco Systems.
"When a company misses, people are inclined to move and move fast," said David Francis, head of equities at Thrivent Financial for Lutherans, which oversees $63 billion in Appleton, Wis. "If you have a disappointment, it adds risk."
The Standard & Poor's 500-stock index fell 1.51, or 0.1 percent, to 1132.05. The Nasdaq composite index, which gets 40 percent of its value from computer shares, dropped 14.56, or 0.7 percent, to 1983.67. The Dow Jones industrial average slipped 2.06, to 10,377.52, as a gain in Microsoft Corp. limited the decline.
The S&P 500 has rallied 4.4 percent from its 2004 low a month ago on optimism that economic growth will be strong enough to boost earnings even if the Federal Reserve raises interest rates. Now, stocks may have outpaced the outlook for profit, and any disappointments may trigger selling, some investors said.
The benchmarks reached their lows for the day after a government report showed producer prices, a measure of what factories, farmers and other producers receive for their goods, had the biggest increase in more than a year. The Federal Reserve's Open Market Committee will meet June 29-30. The median estimate of economists polled by Bloomberg News predicts the Fed will boost its benchmark overnight lending rate by 25 basis points to 1.25 percent.
An index of computer-related companies declined 1.1 percent, the steepest drop among the S&P 500's 10 industry groups. Cisco, the top maker of computer-networking equipment, fell 52 cents, to $23.36. Intel, the largest manufacturer of semiconductors, fell 49 cents, to $27.63.
Jabil sank $3.56, to $24.49. The company, which makes gear for Hewlett-Packard, said 2004 profit will rise to 80 to 82 cents a share, missing an earlier forecast of at least 83 cents.
Microsoft gained 45 cents, or 1.6 percent, to $27.77, for the biggest gain in the Dow average.
An index of oil and gas shares rose 0.6 percent, the biggest gain among the S&P 500's 10 industry groups. ChevronTexaco rose 79 cents, to $92.78. Amerada Hess gained $2.80, to $74.15.
* The New York Stock Exchange composite index rose 10.64, to 6546.01; the American Stock Exchange index rose 5.51, to 1211.61; and the Russell 2000 index of smaller-company stocks fell 0.50, to 569.57.
* Advancing issues outnumbered declining ones by 11 to 8 on the NYSE, where trading volume rose to 1.29 billion shares, from 1.17 billion on Wednesday. On the Nasdaq Stock Market, decliners outnumbered advancers by 3 to 2 and volume totaled 1.44 billion, up from 1.33 billion.
* The price of the Treasury's 10-year note rose $3.13 per $1,000 invested, and its yield fell to 4.68 percent, from 4.72 percent on Wednesday.
* The dollar fell against the Japanese yen and the euro. In late New York trading, a dollar bought 109.48 yen, down from 110.04 late Wednesday, and a euro bought $1.2063, up from $1.2003.
* Light, sweet crude oil for July delivery settled at $38.46, up $1.14, on the New York Mercantile Exchange.
* Gold for current delivery rose to $388.90 a troy ounce, from $384.60 on Wednesday, on the New York Mercantile Exchange's Commodity Exchange.