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11 Jul 06. The Wall Street Journal reported that technology and blue-chip stocks went their separate ways Monday. As always lately, the Federal Reserve was near the center of the action.

Concerns that an economic slowdown after more than two years of monetary-policy tightening by the Fed will hurt the profitability of cyclical companies drove investors away from risky tech stocks, which largely depend on growth to keep pushing earnings higher.

The tech-rich Nasdaq Composite Index fell 13.13 points to 2116.93. Semiconductor stocks paced the decline. The Philadelphia Semiconductor Index, a gauge of chip stocks, fell 2.2%, led by a 2% decline by Intel, a component of the Dow Jones Industrial Average.

The blue-chip average gained 12.88 points to 11103.55 after rising as much as 84 points earlier, weighed down by tech components such as Intel and Hewlett-Packard, which fell 2.8%. The Standard & Poor’s 500-stock index added 1.86 to 1267.34.

Alcoa, a component of the Dow average posted second-quarter operating earnings of 86 cents a share after the close, in line with forecasts. But its revenue of $7.96 billion fell just shy of forecasts for $8.01 billion, and the stock slid more than 4% in after-market trading, according to Inet.

The market sector was flooded with bad news as the wall Street Journal later reported.

On July 14th the paper reported that New York state Attorney General Eliot Spitzer said he filed a lawsuit in federal court in Manhattan charging memory-chip manufacturers with price fixing.

Separately, California Attorney General Bill Lockyer said he would file a similar action in U.S. District Court for the Northern District of California on the 15th. They will be joined by the attorneys general of more than 30 other states. The suits charge that the chip makers made a secret agreement to raise the prices of their memory chips. DRAMs, for dynamic random access memory chips, are used in computers and consumer-electronics devices.

The suits follow an investigation by the Justice Department that has produced guilty pleas by Samsung Electronics Co. and Hynix Semiconductor Inc. of South Korea, Infineon Technologies AG of Germany and Elpida Memory Inc. of Japan. The defendants in the latest lawsuits include Micron Technology Inc. of Boise, Idaho, Infineon, Elpida, Hynix, and Nanya Technology Corp. of Taiwan.

Again on July 14th the paper reported that EMC Corp. said its second-quarter profit fell nearly 5%, a result that the data-storage provider previewed earlier this week when it announced it would fail to meet its quarterly financial goals because of inventory troubles for a key new product.

EMC said net income for the April-June period was $279.1m, down from $293.4m in last year’s second quarter. Profit in both quarters worked out to 12 cents a share, but the year-ago period included an additional 100,574 shares outstanding.

Revenue rose 10% to $2.57bn from $2.34bn a year ago. The latest figure was just shy of the forecast of $2.66bn EMC made before the company said Monday that it would miss that target.

Monday’s pre-earnings announcement sent the company’s shares down 7%. Before the announcement, EMC expected to post a per-share profit of 13 cents, one cent higher than the result announced Friday. Shares slid 2.8% to $9.70 in Friday morning trading on the New York Stock Exchange.

Chief Executive Joseph Tucci said Friday he is “deeply disappointed” with second-quarter earnings results. “Overall execution was clearly not up to EMC standards,” he said during a conference call Friday to discuss the results with Wall Street.

According to Mr. Tucci, during the final week of the quarter orders for a new generation of the company’s storage system “exploded” while demand for the older version “stalled.” That, he said, prompted the warning out of the data storage company.

“I believe the issue was execution failure” on t

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