Chip Stocks Lead Market Decline
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A disappointing earnings report from Micron Technology and an analyst's warning about the health of the chip sector sent stocks skidding on Wednesday.
Micron fell 9% on pricing concerns and a lowered earnings outlook, and Intel lost 2.2% after Morgan Stanley said chip shipments are outpacing PC shipments, raising fears of another inventory glut. Nvidia also lost ground on Morgan's report, while AMD fared a little better on new product hopes. The Philadelphia Semiconductor Index ended the day 2.1% lower.
Meanwhile, blue chips fell on a slightly weaker than expected services sector report and an in-line ADP employment report, which suggested that estimates for a 100,000 jobs gain in Friday's monthly Labor Department report could be on target.
Research In Motion was little changed on positive comments from Credit Suisse a day ahead of its quarterly earnings report.
Constant Contact soared 75% in its stock market debut.
Cree fell 11.5% on a downgrade.
The Nasdaq lost 17 to 2729, the S&P fell 7 to 1539, and the Dow lost 79 to 13,968. Volume declined to 3.02 billion shares on the NYSE, but rose to 1.92 billion on the Nasdaq. Decliners led by a 20-12 margin on the NYSE, and 18-11 on the Nasdaq. Downside volume was 62% on the NYSE, and 62% on the Nasdaq. New highs-new lows were 85-65 on the NYSE, and 147-62 on the Nasdaq.