Stocks tumbled for the third straight day Wednesday on fear of rising interest rates and oil prices, as the fiercest hurricane in decades appeared headed for the Texas Gulf Coast.
Just a day after the Federal Reserve said it expects Hurricane Katrina to have only a temporary effect on the economy, Hurricane Rita was upgraded to a Category 5 hurricane, with sustained winds of 165 miles per hour, headed for the heart of U.S. oil production off the Texas coast.
The combination of rising interest rates from the Fed and higher oil prices and slower economic growth from Gulf storms were too much for investors, who sent stocks sharply lower for the third straight day.
The Nasdaq fell 24 to 2106, the S&P lost 11 to 1210, and the Dow tumbled 103 to 10,378. Volume rose to 2.53 billion shares on the NYSE, but declined to 1.82 billion on the Nasdaq. Decliners led 22-11 on the NYSE, and 23-7 on the Nasdaq. Downside volume was 73% on the NYSE, and 78% on the Nasdaq. New highs-new lows were 192-183 on the NYSE, and 132-141 on the Nasdaq.
AMDfell 4% and Inteledged higher after Merrill Lynch downgraded AMD on valuation concerns and raised Intel to “buy.”
Oracleslipped ahead of its earnings due out after the close on Thursday. Analysts expect earnings of 14 cents a share on revenues of $2.94 billion, up 33% from the year-ago quarter. Palmwill also report Thursday night.
Qualcommrose after the company lifted guidance.