Tech stocks lost ground for a third day Tuesday, as traders awaited critical economic data a week before the Federal Reserve meets.
Dell lost ground again despite restarting its share buyback program to the tune of $10 billion, and blue chip stocks slumped after analysts downgraded the financial sector.
With employment and retail sales data due out in the next few days, investors are hoping the Fed will have room to cut interest rates when it meets next week. San Francisco Fed President Janet Yellen became the third Fed official in a week to signal that a rate cut is coming, and the Bank of Canada cut interest rates, citing U.S. housing market troubles.
Wednesday’s big news will likely be the ADP private sector employment report, followed by retail sales data on Thursday and the government’s monthly nonfarm payrolls report on Friday. Estimates for the ADP report are for a gain of 50,000 jobs, and for Friday’s Labor Department report a gain of 70,000. With speculation that they may come in even weaker than that, the Fed could have plenty of room to cut interest rates.
Nokia fell 3% after it predicted lower average selling prices, raising fears of a price war and sending the wireless sector lower.
Vasco Data Security gained 4% on an upgrade, and Activision was up for a second day on its merger with Vivendi.
The chip sector was mixed, with Micron up 4% and AMD down 4%.
Verizon was up on a wireless asset swap with AT&T, and VeriSign fell 4% on a downgrade.
Cisco, down 2% on the day, announced that it has named Padmasree Warrior of Motorola its new CTO, the latest departure from troubled Motorola.
The Nasdaq lost 17 to 2619, the S&P fell 9 to 1462, and the Dow fell 65 to 13,248. Volume rose to 3.34 billion shares on the NYSE, and 2.08 billion on the Nasdaq. Decliners led by a 21-11 margin on the NYSE, and 19-10 on the Nasdaq. Downside volume was 70% on the NYSE, and 70% on the Nasdaq. New highs-new lows were 44-202 on the NYSE, and 62-266 on the Nasdaq.