Chips Keep Stocks Under Pressure

A big decline in semiconductor shares kept the stock market under pressure on Monday.

Analysts’ downgrades of AMD and KLA-Tencor sent the chip sector to a 4% loss on the day.

Caris & Co. downgraded AMD on competitive concerns following Friday’s big gain on news that Dell will use AMD chips in its high-end servers.

KLA-Tencor tumbled 10% on multiple downgrades after the company said it has received a federal subpoena looking into stock option grants at the company.

The Nasdaq fell 21 to 2173, the S&P 500 lost 5 to 1262, and the Dow lost 18 to 11,125. Volume declined to 2.77 billion shares on the NYSE, and 2.32 billion on the Nasdaq. Decliners led 21-11 on the NYSE, and 21-9 on the Nasdaq. Downside volume was 77% on the NYSE, and 76% on the Nasdaq. New highs-new lows were 26-175 on the NYSE, and 50-170 on the Nasdaq.

CNET , Openwave and Trident also fell on stock option concerns.

Corning lost 5% after lowering LCD guidance.

Agilysis soared on its results.

Atmel gained 5% on a buyout offer.

Yahoo tacked on 3% on a positive Barron’s article.