NEW YORK: U.S. stocks slid on Thursday, Nov 19 as another batch of economic data pointed to the fragility of the recovery and a brokerage's dim view on the semiconductor sector hit TECHNOLOGY [] shares, according to Reuters.
The benchmark S&P 500 suffered its worst one-day percentage fall in three weeks as investors feared that weakness in housing and labor markets would persist, making current stock valuation seem unjustified.
"There's this feeling that the economy has lost momentum from the third quarter," said Bruce Zaro, chief technical strategist at Delta Global Advisors in Boston. "The market gained traction to the downside when the disappointing economic indicators came out."
Bank of America-Merrill Lynch cut its 2010 growth outlook for the semiconductor industry on concerns about a rising inventory glut. It downgraded 10 stocks, including Intel Corp, Texas Instruments Inc and Marvell Technology Corp.
The downgrades were a setback for those betting that the technology sector would fare better than others as the recovery takes hold. Chips are essential to a broad range of products, including computers and mobile devices.
Investors have ridden the tech wave since the S&P 500 hit a 12-year closing low on March 9. Shares of Dow component Intel fell 4.1 percent to $19.30 on Nasdaq. The PHLX Semiconductor Index dropped 3.4 percent.
On the economic front, the Conference Board's index of U.S. leading economic indicators, a gauge of the U.S. economy's prospects, rose 0.3 percent to 103.8, the highest since September 2007. But the increase fell short of Wall Street's expectation for a rise of 0.5 percent.
There was also more disconcerting news in housing. A record one in seven U.S. mortgages were in foreclosure or at least one payment was past due in the third quarter, according to fresh data signaling that the housing market's recovery will be tepid at best.
The U.S. dollar's gain was another headwind for stocks as it pressured prices of natural resources like crude oil and gold, pushing down shares of companies such as Alcoa and U.S. Steel Corp. The S&P materials index shed 1.5 percent as the U.S. dollar index rose 0.2 percent.
The Dow Jones industrial average shed 93.87 points, or 0.90 percent, to end at 10,332.44. The Standard & Poor's 500 Index slid 14.90 points, or 1.34 percent, to 1,094.90. The Nasdaq Composite Index dropped 36.32 points, or 1.66 percent, to 2,156.82.
Bank of America-Merrill Lynch said notions of a strong rebound for the semiconductor industry next year may not be realistic.
Texas Instruments shares fell 3.4 percent to US$24.88 on the New York Stock Exchange, while Marvell Technology Corp shares declined 5.1 percent to US$15.27 on Nasdaq.
The stock of iPod and iPhone maker Apple Inc slid 2.7 percent to US$200.51 and was a top drag on Nasdaq.
Tech news took an even gloomier tone after the closing bell as computer maker Dell Inc reported a slide in quarterly profit. Dell's revenue missed Wall Street's expectations as sales to large business continued to struggle.
Dell's stock fell 6.6 percent to US$14.82 in after-hours trading. On Nasdaq, it had closed at US$15.87
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- Nuang
- Ibrahim bin Ramli@Nuang started his career with CIMB Wealth Advisors Berhad as Agency Manager in April, 2008.Previously he was an Internal Auditors and Accounts Executive with Perodua Sales Sdn Bhd since 17 August, 1994. His background:- 1.Certified of Achievement for Master Sales Leadership from Dr Lawrence Walter Ng of President of The Art Of Learning and International Of Learning Without Learning 2.Certified for eXtra Ordinary Performance of Lawrence Walter Award Certificate for One Million Ringgit Club 2007 3. Certified Life & General insurances 4. Conferred with Diploma in Business Studiess & Bachelor of Business Admin(Hons)Finance from UiTM, Terengganu Branch & Shah Alam respectively;
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