NEW YORK: U.S. stocks fell for a third straight day on Friday, Nov 20 as investors took weaker-than-expected results from computer maker Dell and homebuilder D.R. Horton as a further sign that the recovery would be anemic, according to Reuters.
Following the S&P 500's gain of more than 60 percent from its 12-year closing low of March 9, investors have become more sensitive to signs of weakness as they sought to justify lofty share valuations.
"While it appears to us that the recession is over, there are a lot of lingering signs of pain on Main Street," said Sasha Kostadinov, portfolio manager and research analyst at Shaker Investments in Cleveland, Ohio. "Unemployment is very high, lots of people out of work and that is still causing significant stress."
The news of a 54 percent slide in Dell's quarterly profit rounded off a rocky week for the TECHNOLOGY [] sector, which has been a market darling since March as investors bet on a strong recovery to spur corporate and consumer spending. Shares fell 10 percent.
Unease about the economy's prospects drove investors to snap up defensive stocks seen better able to withstand an uncertain economy, limiting the Dow's losses.
The Dow Jones industrial average fell 14.28 points, or 0.14 percent, to 10,318.16. The Standard & Poor's 500 Index dropped 3.52 points, or 0.32 percent, to 1,091.38. The Nasdaq Composite Index slipped 10.78 points, or 0.50 percent, to 2,146.04.
For the week, the Dow rose 0.5 percent, the S&P 500 fell 0.2 percent and the Nasdaq shed 1 percent. Trading was choppy with the monthly expiration of November options on Friday.
With the year-end fast approaching, there was also a push by some investors, including hedge funds, to lock in profits from the recent rally going into 2010, analysts said.
Dell, the No. 3 personal computer maker, slid 10 percent to US$14.29 a day after it reported a sharp drop in third-quarter profit and sales that missed estimates. Dell was the Nasdaq's top drag.
D.R. Horton Inc tumbled 15.4 percent to US$10.37 after the homebuilder reported a fourth-quarter loss that was wider than expected and said market conditions were "still challenging."
A rebound in the U.S. dollar pressured prices of global commodities, including crude. Energy stocks were hurt, such as Chevron Corp, which fell 0.7 percent to US$76.77. - Reuters