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NEW YORK - The Nasdaq finished lower today as investors sold US technology shares after disappointing financial results from bellwether Intel Corp. and a brokerage downgrade of Cisco Systems Inc.

Intel weighed on all three major indexes. But the Dow and the S&P 500 closed only marginally lower as investors snapped up beaten-down energy shares and a brokerage upgrade lifted shares of blue-chip consumer products maker Procter & Gamble Co.

Intel, the world's largest microchip maker, said yesterday that quarterly profit fell 40 per cent and gross margins would not improve.

In other earnings news, investors were watching for Apple Inc.'s results after Wednesday's closing bell.

"This will probably be the last quarter you get double- digit earnings growth," said Malcolm Polley, president of Stewart Capital Advisors in Indiana, Pennsylvania, whose firm owns Intel shares. "What you continue to see in tech is collapsing prices and margins worsening ... Intel beat their numbers, but they warned last night."

The Dow Jones industrial average slipped 5.44 points, or 0.04 per cent, to end at 12,577.15. The Standard & Poor's 500 Index dipped 1.28 points, or 0.09 per cent, to close at 1,430.62. The Nasdaq Composite Index fell 18.36 points, or 0.74 per cent, to finish at 2,479.42.

Intel shares dropped 5.7 per cent, or US$1.26, to US$21.04, their biggest one-day percentage fall since mid-July. Apple's stock lost 2.2 per cent, or $2.15, to $94.95.

After Intel, shares of Cisco exerted the second-heaviest downward pull on the Nasdaq. Merrill Lynch downgraded the network equipment maker to "neutral" from "buy." Cisco shares fell 3.8 per cent, or US$1.06, to US$26.98 on the Nasdaq.

The energy sector, which has taken a hit this month as crude oil prices slid, provided a bright spot for the broader market today.

Shares of Exxon Mobil Corp. gained 1.2 per cent, or 83 cents, to US$72.46 on the New York Stock Exchange.

Nymex February crude rose US$1.03 to settle at US$52.24 a barrel. That price, however, is down sharply from its year-end level when Nymex crude was more than US$61 per barrel.

Procter & Gamble gained 1 per cent, or 67 cents, to US$65.36 after Goldman Sachs raised its rating on the stock to a "buy."

Economic data today showed a stronger-than-expected gain in the Producer Price Index in December and a rise in December industrial production above economists' forecast.

The 0.9 per cent increase in the Labor Department's overall Producer Price Index weakened the case for the Fed to cut interest rates in the near future, analysts said.

San Francisco Federal Reserve Bank President Janet Yellen said that US interest rates are "within range of the desired setting" but that inflation from a "gangbusters" labour market remains a risk. That point was underscored in the Fed's Beige Book, a report on regional US economic conditions. The Fed said labour markets are tightening and some businesses are having trouble finding skilled workers.

Trading was moderate on the NYSE, with about 1.53 billion shares changing hands, below last year's estimated daily average of 1.84 billion, while on Nasdaq, about 2.34 billion shares traded, above last year's daily average of 2.02 billion.

Advancing stocks outnumbered declining ones by a ratio of about 9 to 8 on the NYSE, while on the Nasdaq, decliners outnumbered advancers by 4 to 3.

- REUTERS