US blue chips slid lower and tech stocks tumbled in extremely thin volume on Monday as security concerns surrounding the Republican convention in New York kept investors on the sidelines.
Technology stocks were particularly hit, with chip makers giving back strong gains made on Friday. Intel Corp, the world's largest chip maker, was 1 percent lower. The company will release its mid-quarter report on Thursday, which will be closely watched for signs of weak back-to-school computer sales.
Microsoft Corp also weighed on major stock indexes and was one of the most actively traded on Nasdaq. On Friday, the software company said the next version of its operating system won't launch until 2006, and it scaled back plans for a key feature.
But with volume so light, traders were unwilling to read too much into the fall.
"There's really no theme behind anything today. There's nothing to make of what's going on, volume is so light," said Robert Drust, managing director of listed trading regional investment bank Wedbush Morgan.
The Dow Jones industrial average, which had closed at a 6-week high on Friday, was down 37.61 points, or 0.37 percent, at 10,157.40. The Standard & Poor's 500 Index was down 5.22 points, or 0.47 percent, at 1,102.55. The technology-laced Nasdaq Composite Index was down 20.06 points, or 1.08 percent, at 1,842.03.
Volume is expected to continue to be light this week as many New Yorkers fled the city before the convention, which opened Monday in Madison Square Garden. The week before the September 6 Labour Day holiday is also popular for summer vacation on Wall Street.
On Friday, only 848 million shares changed hands on the NYSE, the lightest so far this year. A very light 643 million shares had traded on the exchange by early afternoon.
Oil prices continued last week's downward trend amid profit-taking. US light crude futures ended regular trading at $42.28 a barrel, down 90 cents, after sinking as low as $41.30, its cheapest since July 26.
Data released on Monday gave a mixed picture of the economy. Consumer spending rebounded sharply in July, bolstering hopes that the economy has recovered from its recent soft spot. But personal income advanced at a more modest pace than expected, with July's advance was the weakest reading since November 2002.
"Any slightly negative news could be moving things down," said Ozan Akcin, chief market strategist at Puglisi and Co.
In corporate news, Tyson Foods Inc, the largest US meat company producing beef, pork and chicken, cut its 2004 forecast. Shares tumbled $1.37, or 7.73 percent, to $16.36 on the NYSE.
Among shares weighing on the Nasdaq were chip makers, which had bounced higher on Friday. Altera Corp, fell 20 cents to $19.10, a 1 percent fall, while Texas Instruments, fell more than 3 percent, down 69 cents to $19.65. Intel was down 39 cents at 21.63. Microsoft shares fell 14 cents to $27.32 on Nasdaq.
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