Bulls Head for the Exits
Updated from 4:06 p.m. EDT
Stocks fell sharply Tuesday as investors digested two stronger-than-expected pieces of economic news and remained defensive ahead of this week's Federal Reserve rate meeting.
The Dow Jones Industrial Average dropped 120.54 points, or 1.09%, to 10,924.74, with 26 of its 30 components finishing in negative territory. The S&P 500 lost 11.37 points, or 0.91%, to 1239.19, and the Nasdaq Composite plunged 33.42 points, or 1.57%, to 2100.25, reflecting a 3.8% hammering in the Philadelphia Semiconductor Sector index.
The 10-year Treasury bond was up 7/32 in price to yield 5.21%, and the dollar fell against the yen and euro."This market is exhibiting few positive aspects," said Barry Hyman, equity market strategist with EKN Financial. "We can't string more than one strong day together. The bulls have a tough argument, as there's indiscriminate selling going on." General Motors (GM) was the main drag on the Dow. Investors shrugged off its announcement Monday that 35,000 hourly workers have agreed to early retirement or contract buyouts. The stock, which is up 46% since the start of the year partially because of optimism about the buyout plan, dropped $1.83, or 6.6%, to close at $25.92. Dow component DuPont (DD) fell 2.7% after French telecom company Vivendi (V) said it has sold a 1.8% stake in the company. DuPont lost $1.13 to $40.91. The Nasdaq, meanwhile, was pressured by chipmaker Marvell Technology (MRVL), which tumbled 15.9%. Marvell said it will purchase Intel's (INTC) communications and application processor arm for $600 million, plus the assumption of liabilities. About 1.56 billion shares changed hands on the New York Stock Exchange, with decliners outpacing advancers by an 8-to-3 margin. Volume on the Nasdaq was 1.83 billion shares, and losers beat winners 3 to 1. "We're seeing movements on really light volume," said Paul Nolte, director of investments with Hinsdale Associates. "We're still waiting for the Fed to move before anything. There wasn't much in the economic numbers so far that were market-moving, so we're still biding time." August crude added 12 cents to close at $71.92 a barrel. Gold was off $3.30, finishing at $584.40 an ounce. Silver fell 5 cents to $10.19 an ounce, and copper eased 14 cents to $3.18 a pound. To view Gregg Greenberg's video take on today's market, click here.
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