NEW YORK (CNNfn) - The Nasdaq composite index fell for the second straight session Tuesday, erasing all of its gains for the year, as warnings of future weakness from telecom equipment maker Motorola prompted investors to dump volatile technology stocks.
But the Dow Jones industrial average rose as confidence in "old economy" value stocks grew stronger, and investors were willing to wait on the sidelines for proof of strong earnings instead of letting money languish in risky technology shares.
"There are still tough times ahead in technology," said Barry Hyman, chief market strategist at Ehrenkrantz King Nussbaum Inc. "Wall Street wants to see only greater-than-expected earnings."
 The Nasdaq composite index shed 132.30 to 4,055.90, following its second biggest point loss ever Monday, when it fell more than 250 points. The tech-heavy indicator is down 19.3 percent from the high of 5,048.62 set March 10.
The day's action brings the two once-divergent indexes closer to parity then they've been in months. The Nasdaq, up 24 percent for the year in early March, is now down 0.03 percent this year to date. The Dow, halting an earlier downward slide, has recouped much of its big losses of four weeks ago, and is down only 1.8 percent this year.
The Dow Jones industrial average rose 100.52 to 11,287.08, with "old economy" issues General Electric, DuPont and 3M leading the way.
The broader S&P 500 lost 3.87 to 1,500.59.
 Market breadth was mixed. Advancing issues on the New York Stock Exchange topped declining ones 1,528 to 1,432, as trading volume reached 940 million shares. But Nasdaq losers beat winners 2,998 to 1,222 as more than 1.6 billion shares changed hands.
The dollar rose against the yen and euro. Treasury securities fell.
Investors eyeing Dow stocks for value
With the technology sector under pressure to prove itself with strong quarterly earnings, investors are rapidly shifting their focus toward some stable companies, like those found in the Dow.
Quarterly results gave International Paper a boost after the company posted first-quarter earnings of 60 cents a share Tuesday, beating analysts' estimates by 2 cents and far exceeding its own performance in the year-earlier period. International Paper (IP: Research, Estimates) added 9/16 to 43-3/16.
"I think you're getting a bit of a safe haven -- stocks with earnings look good," said Michael Farr, president of Farr Miller & Washington. "If money is coming out of the Nasdaq, it is going into Dow stocks."
Among the Dow leaders: General Electric (GE: Research, Estimates) rose 2-5/16 to 161-3/4, DuPont (DD: Research, Estimates) gained 1-1/2 to 59, and 3M (MMM: Research, Estimates) advanced 2-11/16 to 95-7/16.
Motorola leads tech sector lower
Technology firms had been banking on strong quarterly earnings to keep the bull run of the past six months going, but analysts are now looking for solid proof of earnings. They say it's no longer enough to meet expectations -- Wall Street now wants results to surpass forecasts.
Motorola Inc. (MOT: Research, Estimates) dropped 27-1/2 to 123-1/2. The wireless communications firm posted a first-quarter profit just above Wall Street's estimates after the close of trading Monday. But, in a conference call Tuesday, the company forecast second-quarter results below expectations due to lower margins.
The shakeout in tech stocks
The report was enough to take the rest of the telecom sector lower. Qualcomm (QCOM: Research, Estimates) slipped 3-3/4 to 137-7/16, JDS Uniphase (JDSU: Research, Estimates) dropped 7-15/16 to 102-3/16, Ericcson (ERICY: Research, Estimates) lost 1 to 86-1/2, and Nokia (NOK: Research, Estimates) fell 1-7/16 to 53-5/16.
Other technology leaders on the Nasdaq fell under selling pressure from investors shifting money into the more-established Dow issues.
Cisco Systems (CSCO: Research, Estimates) fell 2-9/16 to 70, Oracle (ORCL: Research, Estimates) shed 5-1/8 to 77-3/8, and Sun Microsystems (SUNW: Research, Estimates) lost 3-1/8 to 87-7/8.
Still, Paul Rabbitt, president of Rabbitt Analytics, told CNNfn's Talking Stocks that expectations for strong earnings ahead will eventually lift technology companies. (320 WAV) (320 AIF).
"We're working through a much-needed correction in technology," agreed Jeff Applegate, chief investment strategist at Lehman Brothers. "There's a bit more discrimination in the marketplace."
Biotechs hurt by Biogen results
Analysts still say there is long-term potential in biotechnology, although Biogen posted first-quarter earnings late Monday that missed Wall Street's expectations by 2 cents per diluted share, pulling some other biotech issues lower.
Biogen (BGEN: Research, Estimates) shed 12 to 53, Medimmune Inc. (MEDI: Research, Estimates) plunged 12-115/16 to 155-9/16, and Genzyme (GENZ: Research, Estimates) lost 5/16 to close at 46-1/2.
In the day's biggest deal, Chase Manhattan (CMB: Research, Estimates) fell 2-1/8 to 86, after saying it has agreed to acquire privately held British investment house Robert Fleming Holdings in a cash and stock deal valued at $7.7 billion.
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