"The semiconductor sector got hit pretty hard today, but the rest of the market pretty much held up. That's good to see," said Mike Kayes, chief investment officer at Eastover Capital. "But the big picture is still that the market needs to see earnings improve, and that hasn't happened yet."

The Dow Jones industrial average closed down 34.97, or 0.4 percent, at 9,589.76, according to preliminary calculations, after falling as much as 152 points and then briefly showing a gain. On Thursday, the average fell 172 points.

Broader stock indicators were also lower, particularly the technology-centered Nasdaq composite index, which lost 19.40, or 1.3 percent, to 1,535.48.

The Standard & Poor's 500 index lost 1.62, or 0.2 percent, to 1,027.53.

The performance wasn't enough to save the market for the week. The Dow lost 3.4 percent, the Nasdaq tumbled nearly 5.0 percent and S&P fell 3.7 percent. The Nasdaq and S&P are also closing in on their post-Sept. 11 lows; the Nasdaq has 112 points to go; the S&P is short by 61.

The bulk of the declines today appeared concentrated in specific stocks that investors felt had disappointed them ­ or had the potential to do so. Intel fell $5, or 18.5 percent, to $22 after it lowered its second-quarter sales forecast because of lower-than-expected demand for personal computer processors in Europe.

The news triggered selling across the chip sector. Intel rival Advanced Micro Devices slid 80 cents to $9.81, while Applied Materials, which makes equipment used in semiconductor production, fell 30 cents to $20.62.

Investors also bid Biogen lower, sending the pharmaceutical company down $5.54, or 11.6 percent, to $42.16, after Biogen reduced its financial estimates for the second quarter and full year, citing difficult market conditions.

Among gainers, Boeing rose 80 cents to $42.76, while J.C. Penney advanced 73 cents to $23.33. General Electric rose 90 cents to $30.20.

But investors didn't blindly buy blue chips. American Express fell $1.20 to $39.16 on broader worries that a weak recovery would hurt the financial sector.

Also today, the Labor Department reported the nation's unemployment rate fell to 5.8 percent in May, its first decline in three months and a stronger showing than economists had predicted. The news failed to spark a rally, though, perhaps because of Intel's and Biogen's warnings, and because the number of people unemployed for 27 weeks or longer continues to rise and comprised about 20 percent of the May total unemployment.

Reports of more accounting woes also pressured the market.

Tyco dropped $4.50, or 30.8 percent, to $10.10 on concerns the company would not shed its lending unit as quickly as expected, and fears that a government investigation of the company's finances is broadening.

Tyco is the latest in a series of companies to face allegations of wrongdoing, and analysts say investors have lost faith in corporate bookkeeping, and therefore the meaningfulness of positive earnings.