Stocks Plunge on Financial, Inflation Worries
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Rising oil prices and calls for more disclosure by investment banks sent stocks plunging Wednesday, overshadowing better than expected results from Cisco Systems (NASDAQ: CSCO).
Stocks spent the morning hovering around breakeven as traders were divided by strong productivity data and another record high in oil prices. But selling accelerated in the afternoon after the SEC called for more disclosure from investment banks, raising fears about what those disclosures might reveal about the state of investment banks. The result was the worst showing for stocks in a month, led by Dow component AIG, which reports earnings Thursday night.
Cisco lost 2% despite beating estimates and raising guidance, as investors were unimpressed by the second straight quarter of sub-par growth from the networking giant.
Even Sprint (NYSE: S) and Clearwire (NASDAQ: CLWR) lost ground despite a $14 billion WiMAX pact.
On Semi (NASDAQ: ONNN) was a rare winner, soaring 20% after raising guidance well above Wall Street expectations.
But ValueClick (NASDAQ: VCLK), Synchronoss (NASDAQ: SNCR) and Cognizant (NASDAQ: CTSH) tumbled on their financial results.
The Nasdaq fell 44 to 2438, the S&P lost 25 to 1392, and the Dow fell 209 to 12,814. Volume rose to 4.05 billion shares on the NYSE, and 2.29 billion on the Nasdaq. Decliners led by a 24-9 margin on the NYSE, and 20-8 on the Nasdaq. Downside volume was 82% on the NYSE, and 81% on the Nasdaq. New highs-new lows were 101-78 on the NYSE, and 60-128 on the Nasdaq.