Stocks plunged Thursday after Fed Chairman Ben Bernanke gave a downbeat assessment of the economy and predicted more mortgage-related losses.
Bernanke’s comments that growth will remain slow until later this year raised the possibility of more rate cuts from the central bank, but investors focused on the weakening economy and the possibility of more troubles at banks and bond insurers.
Technology shares led the way lower, with a 1.74% loss on the Nasdaq, as a number of tech shares had big moves in the wake of earnings reports.
Nvidia plunged 16% on margin and spending concerns despite better than expected results, and Netgear fell 20% on its earnings report. Network Appliance and Agilent fell on weaker than expected outlooks, and RedEnvelope shares were cut in half after the company said it may not be able to continue business beyond mid-year unless it finds financing.
But Comcast, Baidu.com, ValueClick, Amtech Systems and Amkor Technology gained on better than expected earnings reports.
Intel, Tech Data and Level 3 fell on downgrades. Intel lost 3.5% after comments from Goldman Sachs that it could suffer from the slowing economy.
Yahoo bucked the downtrend with a slight gain, as traders continued to speculate on its future.
The after-hours session was a busy one, with Priceline.com up on its results and NetSuite and Brocade down.
The Nasdaq lost 41 to 2332, the S&P fell 18 to 1348, and the Dow tumbled 175 to 12,376. Volume declined to 3.64 billion shares on the NYSE, and rose to 2.28 billion on the Nasdaq. Decliners led by a 25-7 margin on the NYSE, and 21-7 on the Nasdaq. Downside volume was 82% on the NYSE, and 80% on the Nasdaq. New highs-new lows were 43-92 on the NYSE, and 54-111 on the Nasdaq.