Rising oil prices
drive down stocks

NEW YORK » Profit-taking sent stocks modestly lower yesterday after oil prices topped $55 a barrel and a disappointing earnings update from Texas Instruments Inc. cast fresh doubts on the tech sector.

In a session with little economic or earnings news, the sharp rise in oil prices dominated trading. Crude oil futures rose above $55 for the first time in more than four months before slipping lower at the end of trading. A barrel of light crude settled at $54.59, up 70 cents, on the New York Mercantile Exchange.

"Because of the lack of other news, oil becomes the big news," said Brian Bruce, director of global investments at PanAgora Asset Management Inc. in Boston. "In aggregate, there's generally been more good news than bad news. But with nothing else going on today, you're seeing oil put a damper on everybody's enthusiasm."

The Dow Jones industrial average fell 24.24, or 0.22 percent, to 10,912.62.

Broader stock indicators were moderately lower. The Standard & Poor's 500 index was down 5.88, or 0.48 percent, at 1,219.43, and the Nasdaq composite index lost 16.66, or 0.8 percent, to 2,073.55.

Tech stocks slipped after gaining ground in Monday's session, with semiconductor stocks leading the way after Texas Instruments cut its earnings forecasts. That led investors to worry about increasing inventories and lagging sales in much of the tech sector.

Bonds fell along with stocks, with the yield on the 10-year Treasury note rising to 4.38 percent from 4.31 percent late Monday. Gold prices moved higher, while the dollar dropped sharply against the euro and the Japanese yen

"It's like the ghosts of Christmas past -- oil and the dollar," said Bryan Piskorowski, market analyst at Wachovia Securities. "But given that we're fairly steady, just a little lower, that's a good thing. Given the market's recent gains, a little bit of paring shouldn't come as a complete surprise."

Anticipation of Texas Instruments' mid-quarter update fueled buying on Monday, but the electronics manufacturer disappointed Wall Street by trimming the top end of its profit and revenue forecasts for the current quarter. Texas Instruments lost $1.03 to $26.34.

Dow component McDonald's Corp. reported a 4.6 percent rise in U.S. sales in February at stores open at least a year. Global net sales rose 4.4 percent for the month at the fast food chain. McDonald's fell 73 cents to $33.48, however, as investors worried about falling European sales.