Techs Lead Market Downturn

Stocks reversed sharply lower Thursday afternoon after spending much of the day in record territory.

Some attributed the sudden decline, which began around 2 P.M. Eastern Time, to hawkish comments on interest rates by a European Central Bank official, while others cited a JP Morgan research note on that said the Chinese search leader’s quarterly sales could come in below the high end of Wall Street estimates. Shares of the high-flyer skidded 10% to $308.78.

The Nasdaq led the way lower, turning a 1% gain into a 1.4% loss by the close, although the major indexes finished off their lows for the day.

Stocks were up early on better than expected guidance from Wal-Mart and strength in automakers following labor settlements, but the bulk of retail sales reports were weaker than expected, raising the possibility that the Federal Reserve could cut interest rates again when it meets later this month. lost 5.6% to $89.34.

VMware, Research in Motion and Apple also reversed sharply lower. Apple fell 2.7% despite bullish comments by Goldman Sachs, while VMware lost 4% on cautious analyst comments.

The chip sector was weak once again, with Nvidia falling 4.4% on a ThinkEquity downgrade.

Infosys fell 6% despite beating estimates, as traders worried about currency concerns.

The Nasdaq lost 39 to 2772, the S&P fell 8 to 1554, and the Dow lost 63 to 14,015. Volume rose to 3.87 billion shares on the NYSE, and 2.56 billion on the Nasdaq. Decliners led by a 20-12 margin on the NYSE, and 20-9 on the Nasdaq. Downside volume was 57% on the NYSE, and 78% on the Nasdaq. New highs-new lows were 348-77 on the NYSE, and 245-84 on the Nasdaq.

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