Fed Takes Bow, Tech Stocks Take Another Hit

Apple's(AAPL Quote) weak guidance Wednesday provided the main catalyst for pessimism. Shares of Apple fell 6.2% while Lam Research (LRCX Quote) tumbled 14.6% after the chip-equipment maker gave a disappointing forecast.

IBM(IBM Quote) beat earnings estimates after the bell Thursday, but its shares were down 4.6% in recent after-hours trading.

Shares of other tech names that had enjoyed a strong rally thus far this year were similarly punished. Dell(DELL Quote), Intel(INTC Quote) and Cisco Systems(CSCO Quote) each declined 1.9% or more. The Philadelphia Semiconductor Index fell 3.8%.

"People have expected volatility from tech," says Randy Diamond, trader at Miller Tabak. He adds that the headwinds for the sector still exist. The economy is still filled with overflowing inventories, he says. And a warning like Lam's suggests there could be more to come.

Meanwhile, tech firms like Apple weren't the only ones to suffer despite posting better-than-expected results. Merrill Lynch (MER Quote), Harley-Davidson (HOG Quote) and Continental Airlines (CAL Quote) fell anywhere between 1.5% and 3.5%, victims of the "sell the earnings news" mentality that has (seemingly) suddenly descended on Wall Street.

Friday brings results from General Electric (GE Quote) and Citigroup (C Quote), as well as the reaction to IBM's results and the University of Michigan Consumer Sentiment Index.

If the past two days are any indication, the market can do without much more "good news" on earnings or the economy.