Tech worries deepen as traders pull back
NEW YORK » Wall Street stumbled lower yesterday as growing concerns over technology companies led jittery investors to pull money out of the market ahead of this week's earnings reports.
The market has been vulnerable to erratic trading lately, with investors cautious about the direction of the economy and companies' results. The tech sector so far has been knocked down the most, after Apple Inc.'s and Intel Corp.'s outlooks last week fell below the Street's expectations.
With industry leaders like Qualcomm Inc. and Microsoft Corp. releasing their financial results later this week, many investors are bracing for disappointment.
"The market is nervous," said Joe Ranieri, managing director in equity trading at Canaccord Adams. "We've had a few good quarters in a row in tech land. The problem with having good quarters is, it gets harder and harder to impress."
Blue chip stocks were also dragged down by a Wachovia analyst's downgrade of Boeing Co.; the analyst cited possible aircraft order delays from the jet maker.
Overall, earnings reports and economic data this year have signaled growth that's cooling, but not so quickly that it is squeezing corporate profits. This would normally be good news for the stock market, but investors have been retreating -- wisely, many market watchers say -- on signs they may have gotten ahead of themselves late last year, when the Dow began racing into record territory.
The Dow Jones industrials fell 88.37, or 0.70 percent, to 12,477.16 -- the biggest one-day drop since Nov. 27, when the index fell by 158 points. Earlier in Monday's session, the Dow declined by 114 points.
Broader stock indicators also dropped. The Standard & Poor's 500 index fell 7.55, or 0.53 percent, to 1,422.95, and the Nasdaq composite index lost 20.24, or 0.83 percent, closing at 2,431.07.
Declining issues outnumbered advancers by about 2 to 1 on the New York Stock Exchange, where volume came to 2.65 billion shares, down from 2.84 billion shares at the same point on Friday.
The Russell 2000 index of smaller companies was down 7.20, or 0.92 percent, at 777.96.
Bond prices rose, though investors' hopes for an interest rate cut have dwindled in response to upbeat economic data. The yield on the benchmark 10-year Treasury note edged lower to 4.76 percent from 4.78 percent late Friday.
The dollar was mostly higher against other major currencies, while gold prices slipped.
The stock indexes rebounded slightly from the session's lows after crude oil resumed its downtrend. Crude fell 86 cents to settle at $51.13 a barrel Monday on the New York Mercantile Exchange, after briefly rising above $53.44.