Tech shares drag Wall St. lower as chipmakers tumble

NEW YORK (Reuters) - U.S. stocks fell on Friday, with the tech sector weighing the most after a chip maker warned of a major pullback in the industry.

Major Wall Street indexes were on track for a third straight week of losses, the longest such streak in nine months, with the S&P 500 at an inflection point as it nears key support at the 200-day moving average.

Chipmakers led the decline, with the PHLX semiconductor index down 6.6 percent, the most for any day since mid February 2009, after Microchip Technology warned of a broad-based industry downturn.

Microchip Tech shares tumbled 11.9 percent and the SOX entered correction territory, falling as much as 15.4 percent from a 13-year high hit less than a month ago.

At 3:29 p.m. the Dow Jones industrial average fell 59.56 points, or 0.36 percent, to 16,599.69, the S&P 500 lost 14.86 points, or 0.77 percent, to 1,913.35 and the Nasdaq Composite dropped 85.03 points, or 1.94 percent, to 4,293.30.

The largest percentage gainer on the S&P 500 was L-3 Communications Holdings , which rose 9.9 percent, while the largest percentage decliner was Microchip Tech.

The largest percentage gainer on the Nasdaq 100 was Ross Stores , up 2.0 percent, while the largest percentage decliner was NXP Semiconductors , down 12.3 percent.

Declining issues outnumbered advancing ones on the NYSE by 2,231 to 835, for a 2.67-to-1 ratio on the downside; on the Nasdaq, 1,817 issues were falling and 876 advancing for a 2.07-to-1 ratio favoring decliners.

The benchmark S&P 500 index was posting 7 new 52-week highs and 41 new lows; the Nasdaq Composite was recording 16 new highs and 301 new lows.

(Reporting by Rodrigo Campos; Editing by Nick Zieminski)