Updated from 4:04 p.m. EDTTech stocks led the market lower Wednesday, as bears used an uptick in geopolitical tension and a jump in crude oil to retake control of a volatile market. The Nasdaq Composite lost 37.10 points, or 1.69%, to 2153.34. The Dow Jones Industrial Average fell 76.20 points, or 0.68%, to 11,151.82, and the S&P 500 dropped 9.28 points, or 0.72%, to 1270.91. The 10-year Treasury bond tumbled 19/32 in price to yield 5.23%, and the dollar rose against the yen and euro. The Nasdaq was pressured by a 7.9% decline in Marvell ( MRVL), which saw its name added to the list of companies to be questioned by regulators about its option grants. The chip company said it received an informal inquiry from the Securities and Exchange Commission and formed a special committee of its board to investigate the matter. Shares dropped $3.53 to $41.31. Meanwhile, the Dow was knocked down by losses of 2.2% or more in components Intel ( INTC) and Caterpillar ( CAT). Overseas hot spots were again on investors' minds a day after North Korea fired at least six missiles over the Sea of Japan in defiance of U.N. warnings about weapons testing. Only one of the missiles is believed to have been capable of reaching U.S. soil, and that one fell into the ocean less than a minute after takeoff. "The market was clearly affected by the geopolitical story out of North Korea," said Barry Hyman, equity market strategist with EKN Financial. "However, we came off our lows, as there are expectations of a strong employment report on Friday. A strong report is good because the market has been worrying about a weakening economy. The question is if inflation is still a problem." About 1.49 billion shares changed hands on the New York Stock Exchange with decliners outpacing advancers in an 8 to 3 ratio. Volume on the Nasdaq was 1.58 billion shares, and decliners beat advancers 7 to 3. Amid a search for safe havens, gold gained $13.70 to $629.70 an ounce. Other metals also strengthened. Copper added 5 cents to $3.40 a pound, and silver rose 50 cents to close at $11.41 an ounce. Crude for August delivery, already up 20% this year because of a nuclear research standoff with Iran, spiked $1.26 to finish at $75.19 a barrel, a record close for a front-month contract. "The things the market ignores one day it focuses on the next," said Ken Tower, chief market strategist with CyberTrader. "That's the case with today's reaction to North Korea's missile tests, which were widely advertised a week ago and then fell off investor's radar." Despite gold's advance, the Amex Gold Bugs index finished down 2.5%. In other sectors, the Dow Jones Transportation Average and the S&P Retail index both fell 1%. The Amex Oil index was higher by 0.3%. To view Gregg Greenberg's video take on today's market,
On Monday, U.S. stocks rose as investors rotated into long positions on the quarter's first day. During a holiday-shortened session, the Dow rose 0.7% to 11,228, and the S&P 500 gained 0.8% to 1280 The Nasdaq added 0.8% to 2190. A 1.3% decline in General Motors ( GM) tempered the Dow's gain on Monday. On Wednesday, reports emerged that GM CEO Rick Wagoner will meet with Renault-Nissan CEO Carlos Ghosn later this month to discuss a three-way alliance that was first floated last week by Kirk Kerkorian. Kerkorian's Tracinda Corp. owns about 10% of GM's stock. On Wednesday, GM rose a penny to $29.42. Wednesday's main economic report came from the Commerce Department, which said factory orders rose 0.7% in May. Economists expected a 0.1% increase, compared with a 1.8% decline in April. "Today may be another day of positioning, but the focus should quickly turn to Friday's employment report and the upcoming second-quarter earnings reports," said Marc Pado, U.S. market strategist with Cantor Fitzgerald. Sharing headlines with North Korea's missile launch was news that Kenneth Lay, the former Enron chief executive who was convicted in May of criminal fraud and conspiracy, has died. He was 64 years old. Lay died of a heart attack in Aspen, Colo., according to a family spokeswoman. In ratings news, Banc of America Securities upgraded AT&T ( T) to buy from neutral, setting a stock price target of $30. Still, shares gave up 3 cents, or 0.1%, to finish at $27.90. Citigroup raised McGraw-Hill ( MHP) to buy, saying vibrant securities markets should keep its Standard & Poor's unit humming with bond-rating business. Citi also sees continuing strength in school textbooks. McGraw-Hill added $1.02, or 2%, to $51.34. Matrix Research upgraded three tech companies on Wednesday. The firm raised Qualcomm ( QCOM) and Cisco Systems ( CSCO) to buy from hold, and assigned Palm ( PALM) a strong buy. Still, Qualcomm finished down 3.3% to $38.17 and Cisco was off 2% to $19.60. Palm was higher by 1.7% to $16.41. Several firms initiated coverage of MasterCard ( MA). JPMorgan Chase and HSBC Securities gave the company a neutral rating, while Citigroup initiated the stock with a buy. Prudential gave the shares an overweight rating. Mastercard climbed 30 cents, or 0.6%, to $47.60.
Mercury Interactive ( MERQ), the Mountain View, Calif., business software company, said the SEC is weighing enforcement actions against three directors in the options backdating scandal. Mercury also disclosed a three-year earnings restatement related to the investigation. Mercury gained $1.35, or 3.8%, to $36.95. Shares of Duquesne Light Holdings ( DQE) surged 17.9% after the company said it would be bought by a consortium for $1.59 billion. A group including Australia's Macquarie Bank and other investors will pay $20 a share for the Pittsburgh-based energy company, a 21.7% premium over the stock's closing price Monday. The stock jumped $2.95 to $19.39. Drugstore chain Walgreen ( WAG) said same-store sales rose 9% last month, as total sales jumped 14.2% to $3.99 billion. Shares were lower by 13 cents, or 0.3%, to $45.11. Meanwhile, Wendy's ( WEN) said same-store sales at U.S. company-owned restaurants rose 0.5% to 0.6% during the second quarter, falling short of expectations. Wendy's ended the session up 39 cents, or 0.7%, to $58.64. Overseas stocks fell. London's FTSE 100 finished down 1% to 5827, and Germany's Xetra DAX lost 1.8% to 5626. In Asia, Japan's Nikkei fell 0.7% to 15,524, and Hong Kong's Hang Seng dipped 0.6% to 16,267.