TECH STOCKS: A Solid Setback

It was not a good day on Wall Street, particularly if your name was IBM or Martha Stewart. The value of some tech stocks slid, as evidenced by a 1.5% decline in our InformationWeek 100 index. Other indexes managed to end trading Tuesday up after seesawing all day.

IBM's price fell more than 4% after the company disclosed late Monday that the Securities and Exchange Commission is investigating revenue-recognition practices at the company. The markets generally rallied, however, in response to positive remarks about the economy by Federal Reserve chairman Alan Greenspan and news that the number of corporate layoffs fell 53% in May, to their lowest level since November 2000.

An insider-trading scandal continues to mire Martha Stewart's media empire, but how that impacts technology shares is not immediately apparent. Chip and hardware shares generally faired well Tuesday. Intel shares that gained more than 3.5%.

Our InformationWeek 100 fell 3.69 points, to 239.62, while the Nasdaq index as a whole rose 12.81 points, or 0.8%, to finish the day at 1,603.56. The Nasdaq-100 tracking stock (QQQ) closed at $29.86, up 28 cents, or 1%. More than 82 million shares of the tracking stock were traded. The Dow rose 25.14 points, or 0.3%, to close at 8,922.95, while the S&P 500 rose 4.56 points, or 0.5%, to 971.56.