Tech Wreck Sinks Stocks

Apparel retailers were the worst retail performers for the month. Abercrombie & Fitch (ANF Quote), Gap (GPS Quote), Chico's FAS (CHS Quote) and Limited (LTD Quote) all reported monthly losses and missed consensus targets.

Aside from Wal-Mart, GM was a winner on the Dow. The automaker's shares surged 4.9% to $39.99, a new 52-week high, after the United Auto Workers union ratified a landmark labor deal with the company.

In earnings, PepsiCo (PEP Quote) reported a 17% advance in its third-quarter profit, easily topping the Thomson First Call estimate. However, shares ended down $1.83, or 2.5%, to $71.77.

Away from equities, commodity prices were on the rise. The weekly inventory report from the Energy Department showed an unexpected decline of 1.7 million barrels in crude stocks, and oil jumped $1.78 to $83.08 a barrel.

Gold futures were up $10.60 to $756.70 an ounce, and silver gained 12 cents to $13.98 an ounce.

On the economic front, the Commerce Department said that the August trade deficit fell to $57.6 billion from $59.0 billion, falling short of economists' estimates.

"The trade deficit still is about 5% of [gross domestic product] and remains a big drag on economic growth and incomes," said Peter Morici, professor at the University of Maryland School of Business and former Chief Economist at the U.S. International Trade Commission. "Simply, the trade deficit cannot be significantly reduced without curbing the U.S. appetite for imported goods, especially, petroleum, Chinese consumer goods and automobiles."

The Labor Department also released two separate reports. It said jobless claims fell to 308,000 from 320,000 last week, below the consensus 315,000. Also, its import price index slipped 0.2% last month, compared with a 0.1% decline in August.

Treasury prices were mixed. The 10-year note was up 3/32 in price, cutting the yield to 4.64%. The 30-year bond was down 1/32 to yield 4.87%.

Overseas markets were higher. In Asia, Hong Kong's Hang Seng rose 2%, and Japan's Nikkei 225 climbed 1.6%. In Europe, London's FTSE 100 rose 1.4%, and Germany's Xetra Dax added 0.6%.