Updated from 4:05 p.m. EDT
The major stock averages succumbed to heavy selling Thursday as recent economic data sparked concerns about the strength of the consumer.
Dow Jones Industrial Average
ended down 141, or 1.68%, to 8283. The
finished down 41, or 3.19%, to 1251 and the
lost 14, or 1.59%, to 879. The Dow had fallen more than 200 points earlier in the session.
Volume on the Big Board reached 1.3 billion shares while Nasdaq volume hit 1.5 billion. Breadth was negative on both exchanges, with decliners outpacing advancers by more than 2-to-1.
Selling was broad based but particularly pronounced in the technology space, where chip stocks fell almost 5% and networkers shed 4%. Safe havens like gold and homebuilding stocks were the only groups showing any strength.
"Investors continue to be worried about the economy and geopolitical events," noted Peter Coolidge, managing director of trading at Brean Murray.
First-time jobless claims fell by 8,000 to 403,000 in the latest week, in line with expectations. But the four-week moving average, considered a more reliable indicator, rose by 5,250 to 400,000 -- the highest since June 8.
In addition, a slew of retailers reported disappointing same store sales results for August, which "raised concern that the consumer may be pulling back," noted Larry Wachtel, chief market analyst at Prudential Securities.
, the nation's largest retailer, was down 2% to $50.94 after saying that sales rose just 3.8% last month amid sluggish demand for back-to-school apparel.
Still, there are anecdotal signs that U.S. consumers haven't given up spending. On Wednesday, the Big Three automakers each reported strong gains in August vehicle sales, with
extending its interest-free financing incentives.
Adding to the market's woes Thursday was a weaker-than-expected non-manufacturing report from the Institute of Supply Management. Factory orders also missed economists' estimates and productivity growth was reported to have slowed sharply in the second quarter.
Concerns about war in Iraq, the Sept. 11 anniversary next week, and the implications of a 19-year market low in Japan contributed to the gloomy tone. Coolidge also noted that a failed assassination attempt on Afghan president Hamid Karzai earlier today was weighing on the market.
Meanwhile, investors were anxious ahead of Thursday afternoon's midquarter update from
. The stock had been knocked around all week as Wall Street analysts debated the outlook for its microprocessor franchise.
After the bell, Intel said it expects third quarter revenue to be "slightly below the midpoint of the previous range of $6.3 billion to $6.9 billion, and within a narrower range of $6.3 billion to $6.7 billion." The chipmaker said microprocessor unit sales are trending toward the lower end of the normal seasonal pattern. Shares ended the regular session down 6% to $15.11.
Other chip stocks also came under pressure Thursday after Bear Stearns downgraded
to attractive from buy, and Credit Suisse First Boston dropped it and
to from hold to buy. CSFB cited weak end-user demand, among other things, for the downgrade.
In the financial space, shares fell amid a report that
and CSFB have been queried by a congressional committee about their handling of IPO shares in the late 1990s. The panel is already investigating Salomon Smith Barney's activities during the bull market new-issue mania, but its underwriting record for hot IPOs pales in comparison to the new targets.
A profit affirmation from Dow component
Procter & Gamble
lifted the stock early but did little to support the blue-chip index. P&G expects fourth-quarter earnings to be up in the mid-teens, on a percentage basis, and for sales to be up in the high single digits. The stock rose 1.46% to $89.85.
turned in a stellar quarter and raised guidance as did competitor
, which sent its shares up 3% to $55.33.
Stocks were coming off a session in which the Dow added 116 points to 8424 and the Nasdaq gained 28 points to 1292. But analysts said the moves were largely the result of bargain hunting in the wake of Tuesday's 350-point selloff.