Tech Stocks Lead Market Retreat
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U.S. stocks opened sharply higher Monday on news of a nearly $600 billion Chinese economic stimulus package, then spent the rest of the day selling off on worries about the health of the domestic economy.
A Circuit City (NYSE: CC) bankruptcy, huge losses at AIG (NYSE: AIG) and Fannie Mae (NYSE: FNM) and worries about GM's (NYSE: GM) solvency weighed on the broader market.
In the tech sector, a steep loss by Nortel (NYSE: NT) and a downgrade of Google (NASDAQ: GOOG) did the damage, turning a 2% gain for the Nasdaq into a 1.9% loss by the close.
Google shares fell 3.7% after a Barclays analyst lowered estimates on the company, saying the slowing economy will likely be felt in the search market.
Nortel tumbled 19% to close below $1 after reporting a $3.4 billion loss, $3.2 billion of which was related to charges and write-downs.
Applied Materials (NASDAQ: AMAT) lost 4.7% on an Oppenheimer downgrade, while Dell (NASDAQ: DELL) lost 5.5% on reports that it won't have its new portable music player ready in time for the holidays.
Brocade (NASDAQ: BRCD) and Foundry (NASDAQ: FDRY) both gained after they agreed on revised merger terms and Brocade raised guidance.
Centennial Communications (NASDAQ: CYCL) shares doubled on a buyout offer from AT&T (NYSE: T).
The Nasdaq lost 30 to 1616, the S&P fell 11 to 919, and the Dow lost 73 to 8870. Volume fell to 4.66 billion shares on the NYSE, and 1.73 billion on the Nasdaq. Decliners led by a 23-11 margin on the NYSE, and 19-8 on the Nasdaq. Downside volume was 70% on the NYSE, and 77% on the Nasdaq. New highs-new lows were 4-192 on the NYSE, and 8-219 on the Nasdaq.