The stock market’s best five-day rally in more than 75 years came to an abrupt end on Monday, as the major indexes gave back half those gains in the seventh worst day in market history.
Leading the way lower was the chip sector (PHI: SOX), which tumbled after the Semiconductor Industry Association reported a 2.4% drop in October chip sales. Intel (NASDAQ: INTC) fell 9%, Texas Instruments (NYSE: TXN) lost 10% and AMD (NYSE: AMD) tumbled 15%.
Memory chipmakers were weak on news that Qimonda (NYSE: QI), majority owned by Infineon (NYSE: IFX), could face bankruptcy if it can’t raise cash soon.
Every stock in the Nasdaq 100 ended the day lower, and the Nasdaq fell 9% on the day. Microsoft (NASDAQ: MSFT) lost 8%, Google (NASDAQ: GOOG) 9%, Cisco (NASDAQ: CSCO) 9.6% and Dell (NASDAQ: DELL) 10%.
Also weighing on investor sentiment was concern that stronger than expected Black Friday sales won’t carry over to the rest of the holiday shopping season — and an analyst’s call that consumer credit lines could be cut. Amazon (NASDAQ: AMZN) and eBay (NASDAQ: EBAY) lost 5% and 7%, respectively, and Blue Nile (NASDAQ: NILE) and Overstock (NASDAQ: OSTK) suffered double-digit percentage losses.
Weak construction and manufacturing data also underscored just how deep the contraction has become. And the National Bureau of Economic Research announced that the current recession officially began in Dec. 2007, making the ongoing contraction the longest since the 16-month recession of 1981-1982.
The Nasdaq plunged 137 to 1398, the S&P tumbled 80 to 816, and the Dow plunged 679 to 8149. Volume declined from Wednesday’s pre-holiday levels to 6.51 billion shares on the NYSE, and 1.95 billion on the Nasdaq. Decliners led by a 33-5 margin on the NYSE, and 24-4 on the Nasdaq. Downside volume was 98% on the NYSE, and 97% on the Nasdaq. New highs-new lows were 14-104 on the NYSE, and 5-147 on the Nasdaq.
