Updated from 4:05 p.m. ESTTechnology stocks led a broad-based sell-off Monday, albeit on relatively light trading volume, as UAL's ( UAL) bankruptcy filing and a slew of negative analyst calls pressured the averages. The Dow Jones Industrial Average closed down 172 points, or 2%, at 8473, while the Nasdaq lost 55 points, or 3.9%, to 1367. The S&P 500 gave up 20 points, or 2.2%, to 892. Among individual sectors, financial services, transports, semiconductor, storage and retail were the weakest, while drug issues were stronger. The Philadelphia Semiconductor Index was slipped 7.2%, and the Amex Networking Index plunged 9.3%. Decliners outpaced advancers 8 to 3 on the New York Stock Exchange, where 1.23 billion shares traded. On the Nasdaq, losers beat winners more than 2 to 1 on volume of 1.47 billion shares. "Volume is light, breadth is bad and there is no meaningful upside leadership at all," said trader James De Porre, a contributor to RealMoney.com. Keith Keenan, vice president of institutional trading and a partner at Wall Street Access, noted the low equity put/call ratio. That often means market participants aren't interested in hedging their portfolios or making speculative downside bets, possibly the result of such weak volume. United Airlines parent UAL made its much-anticipated Chapter 11 filing in Chicago, becoming the biggest U.S. carrier ever to take that step. The company has about $1.5 billion in post-petition financing in hand and expects to continue operating as it reorganizes. Stockholders probably will be wiped out in the proceeding. Stocks were showing little reaction to the expected appointment of CSX Chairman John Snow to Treasury Secretary and former Goldman Sachs co-Chairman Stephan Friedman to White House economic adviser. The pair would replace Paul O'Neill and Larry Lindsey, who resigned Friday. Snow belongs to a business policy group that backs a fiscal stimulus measure similar to the one being pushed by the Bush administration in recent days. Friedman shared the helm of Goldman with Robert Rubin, the Clinton administration's Treasury chief.
IBM ( IBM) saw its shares downgraded by Bank of America to market perform from buy. The bank noted the stock is trading at the high end of its historic price-to-earnings range and cut its 2003 earnings estimate to $4.25 from $4.35. Shares fell 3.3% to $79.59 on the news. Other downgrades included Emulex ( EMLX), dropped to neutral from outperform by SoundView; Qualcomm ( QCOM), cut to in line from outperform by Salomon Smith Barney; video game stocks Activision ( ATVI), Midway ( MWY) and THQ ( THQI), moved to hold from strong buy by UBS; and Cable & Wireless ( CWP), dropped to sell from neutral by Merrill. In the retail space, Wal-Mart ( WMT) said same-store sales as of Dec. 6 are tracking at the low end of its previously disclosed range of 3% to 5% growth in the holiday period. But the world's largest retailer still expects same-store sales for the five weeks ending Jan. 3 to increase within the projected range. The stock closed down 2.2% at $51.85. Treasuries were higher, with the 10-year note recently up 12/32 to yield 4.04%. The 30-year bond was up 21/32, yielding 4.93%. Overseas markets were lower, with London's FTSE 100 down 1.8% at 3940 and Germany's Xetra DAX down 3.5% at 3096. In Asia, Japan's Nikkei fell 0.4% to 8828, and Hong Kong's Hang Seng lost 1.1% to 9868.