Big Blue Can't Stop Stock Freefall
Page 1 of 1
IBM's (NYSE: IBM) better than expected results were good for an early rally on Thursday, but stocks fell off a cliff in the final two hours of trading, sending the Dow to its worst one-day loss since the crash of 1987.
Concern about GM's (NYSE: GM) solvency was the latest culprit for the historic sell-off that has sliced a quarter off the U.S. stock market capitalization in just three weeks, sending the major indexes to five-year lows. The sell-off also came as the SEC lifted temporary short-selling restrictions.
Even IBM (NYSE: IBM) ended the day 1.7% lower, more than 6% off its high for the day.
Friday could be another eventful day, with GE's (NYSE: GE) earnings report and a Lehman Brothers credit default swap auction likely to take center stage. It is the third time in recent days that the government has unwound the complex debt protection instruments, following Fannie Mae, Freddie Mac and Washington Mutual. The auction is expected to be complete by 2 p.m. Eastern.
Not all stocks finished lower, however. Applied Materials (NASDAQ: AMAT), Research In Motion (NASDAQ: RIMM) and Flextronics (NASDAQ: FLEX) were the only winners out of the 25 most actively traded NASDAQ stocks.
Cisco (NASDAQ: CSCO) led the tech sector lower with a 6% loss after RBC Capital lowered estimates on the company on concern that bookings may be slowing.
Amazon.com (NASDAQ: AMZN) and Yahoo (NASDAQ: YHOO) lost 8% each on growing slowdown fears.
Micron (NYSE: MU) was unchanged on a restructuring plan.
The Nasdaq lost 95 to 1645, the S&P fell 75 to 909, and the Dow plunged 678 to 8579. Volume declined to 8.37 billion shares on the NYSE, and 3.02 billion on the Nasdaq. Decliners led by a 32-3 margin on the NYSE, and 25-4 on the Nasdaq. Downside volume was 95% on the NYSE, and 92% on the Nasdaq. New highs-new lows were 6-1804 on the NYSE, and 7-1058 on the Nasdaq.