Wed, Feb 14, 2001 EST
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Techs Fall on Earnings Worries, Blue Chips Advance
By Lisa Singhania   Associated Press
NEW YORK — Investors in search of safe investment bets sent blue chips soaring Monday. Technology issues slid for a second straight session, reflecting fears that the sector will suffer the most in an economic slowdown.

Analysts said many investors were nervous about bellwether Cisco Systems, which is expected to release earnings Tuesday.

In afternoon trading, the Dow Jones industrial average gained 90.12 to reach 10,954.22.

The Nasdaq composite index slipped 54.28 to 2,606.22. The Standard & Poor's 500 index dropped 0.86 to 1,348.61.

Corporate profits again were the focus, with the tech sector under especially strong scrutiny in advance of Cisco's results. The company's stock was off $1.68 at $33.81.

"Meeting earnings shouldn't be a problem, but it's Cisco's outlook going forward that's important," said John Forelli, portfolio manager at Independence Investment Associates. "If they are cautious in their comments about the future, it will give people a reason to sell."

The apprehension extended to other tech stocks, particularly semiconductor and computer companies. Sun Microsystems fell $1.50 to $27.69 and Intel slipped $1.67 to $34. But IBM gained $1.94 to 112.21.

Growing evidence that the economy is slowing has made Wall Street uneasy, sidelining many would-be buyers.

Although the Federal Reserve has cut interest rates twice since Jan. 1, many investors remain reluctant to fully commit to the market because they're unconvinced earnings will improve anytime soon. The Dow, Nasdaq and S&P; sold off Friday on worries about whether Fed policymakers, who don't meet again until late March, can do enough to halt the nation's economic slide.

"You're going to continue to see people cautious about the economy, questioning whether we're really going to have a quick snapback in the second half of 2001," Forelli said.

PepsiCo slipped 6 cents to $44.93 after announcing quarterly results in line with analysts' expectations.

The Dow got a boost from its non-technical components, including 3M, up $2.24 at $110.97, and DuPont, which rose $1.35 to $43.60. Merck gained 97 cents to reach $84.94, while American Express climbed 37 cents to $48.48.

Advancing issues traded nearly evenly with decliners on the New York Stock Exchange. Volume came to 659.64 million shares, compared with 679.72 million at the same point Friday.

The Russell 2000 index lost 3.01, falling to 498.49.

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