Stocks tumbled Monday on more financial fears and jitters ahead of quarterly results from Hewlett-Packard (NYSE: HPQ) and Home Depot (NYSE: HD).
Worries about the future of Fannie Mae (NYSE: FNM), Freddie Mac (NYSE: FRE) and Lehman Brothers (NYSE: LEH) sent financial shares plunging and the broader market 1.5% lower.
Tuesday will be even busier for investors, who will have to contend with housing and inflation data and earnings from Home Depot before the market opens — and then results from HP after the close.
Tech stocks have fared much better than their blue chip counterparts in recent months. The Nasdaq has gained more than 10% since its low for the year in March, while the Dow is down by more than 2% since then.
The reason for the outperformance has been investors’ belief that IT spending will continue to hold up despite a brutal housing market and credit crisis now in its thirteenth month. It will be up to HP this week — and Dell (NASDAQ: DELL) next week — to prove that the trend remains intact.
Analysts expect HP to post July quarter earnings of 83 cents a share on an 8% rise in sales to $27.4 billion, and they are looking for similar growth from the company well into next year.
Despite broad-based weakness, some stocks managed gains on Monday, among them Broadcom (NASDAQ: BRCM) and Nvidia (NASDAQ: NVDA), which rose on optimism about their prospects even as SanDisk (NASDAQ: SNDK) shares were hit by skepticism over takeover rumors.
VMware (NYSE: VMW) was another winner, up 4.7% on no apparent news.
The Nasdaq fell 35 to 2416, the S&P lost 19 to 1278, and the Dow plunged 180 to 11,479. Volume declined to 3.88 billion shares on the NYSE, and 1.69 billion on the Nasdaq. Decliners led by a 24-9 margin on the NYSE, and 19-9 on the Nasdaq. Downside volume was 82% on the NYSE, and 82% on the Nasdaq. New highs-new lows were 37-106 on the NYSE, and 47-88 on the Nasdaq.
