Tech shares increase on Wall Street
U.S. stocks sank in a thinly traded session Wednesday as weakness in the technology sector dragged the market lower.
The Dow Jones industrial average (INDU) was down 47 points, or 0.4%, in afternoon trading. The S&P 500 (SPX) eased 5 points, or less than 0.4%, and the Nasdaq composite (COMP) fell 27 points, or 1%.
Shares of big technology companies were among the weakest performers. Dell (DELL, Fortune 500) plunged 10% after the computer maker issued a disappointing sales outlook late Monday. Hewlett-Packard (HPQ, Fortune 500) tumbled over 4%.
“Technology is not cooperating,” said David Rovelli, managing director of U.S. equity trading at Canaccord Adams. “The Nasdaq is bringing us lower.”
Stocks opened higher following upbeat quarterly results from Target. But the gains faded in the afternoon, and investors gravitated toward more defensive stocks.Telecommunications companies Verizon (VZ, Fortune 500) and AT&T (T, Fortune 500) both added about 1.5%.
Shares of financial firms, which have underperformed the market this year, were also a bright spot. JPMorgan (JPM, Fortune 500), Bank of America (BAC, Fortune 500) and American Express (AXP, Fortune 500) all gained over 1%.
Overall, traders remain wary given the uncertain outlook for the U.S. economy and the challenges facing European leaders as they struggle to resolve the festering debt crisis hanging over the euro zone.
Those concerns were behind theextreme volatility that rocked stock markets around the world last week. But trading has been more subdued this week with many shell-shocked investors moving to the sidelines or taking a vacation.
On Wednesday, only about 500 million shares changed hands on the New York Stock Exchange. Thin trading volumes can often lead to volatility in stock prices.
U.S. stocks fell Tuesday after German Chancellor Angela Merkel and French President Nicolas Sarkozy spoke about Europe’s ongoing debt troubles, but offered little in the way of action.
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