Tech Weakness Sinks Stocks

Microsoft will appeal the ruling, which also includes a threat of additional fines of almost $4 million a day starting next month.

Elsewhere, the S&P Retail Index fell 2.5% amid concerns over consumer spending. Leading the index lower were Best Buy(BBY Quote), down 5.8%, and Circuit City(CC Quote), off 4.2%.

About 1.48 billion shares changed hands on the New York Stock Exchange, with decliners outpacing advancers by an 11-to-5 margin. Volume on the Nasdaq was 1.80 billion shares, and three times as many stocks fell as rose.

Oil rose after an Energy Department report that showed crude inventories fell by 6 million barrels last week, a much larger decline than expected. Gasoline inventories dropped by 400,000 barrels, and stores of distillates rose by 2.6 million barrels. In Nymex floor trading, August crude added 79 cents to finish at $74.95 a barrel and now sits 60 cents below its record high.

Precious metals were mostly higher. Gold added $8.10 to close at $651.20 an ounce, silver was unchanged at $11.55 an ounce, and copper was higher by 3 cents $3.66 a pound.

The data calendar was nearly bare, but in one report the Commerce Department said the U.S. trade deficit grew to $63.8 billion in May from $63.4 billion in April. Economists had been estimating that the deficit would widen to $65 billion for the month.

Ian Shepherdson, chief economist with High Frequency Economics, said the trade number has the potential to "add 0.4% to second-quarter gross domestic product growth, raising the chance of a 3%-plus number."

Shares of Infosys(INFY Quote) climbed 5% after the Indian outsourcer said second-quarter earnings rose a faster-than-expected 44% from last year. The performance helped prop up the Bombay market a day after train bombings killed 200 people and injured hundreds of others.

In other earnings, M&T Bank(MTB Quote) said it earned $212.6 million, or $1.87 a share, in the second quarter, up 8% from last year. Results beat the Thomson First Call consensus of $1.82 a share. The stock fell 52 cents, or 0.4%, to close at $117.83.