“U.S. stocks extended losses for a second day Thursday after Federal Reserve Chairman Ben Bernanke painted a perilous economic outlook and worries about Cisco Systems Inc.’s quarter helped fuel a sell-off in the technology sector,” Kate Gibson reports for MarketWatch.
“At 2 p.m. Eastern, the Dow Jones Industrial Average ($INDU: 13,132.00, -168.02, -1.3%) was off 121.9 points, or 1%, to 13,175.2, with 18 of its 30 components lower. American International Group Inc. (AIG: 54.52, -3.38, -5.8%) and IBM (IBM: 105.15, -5.93, -5.3%) fronted the slide, with both blue chips down nearly 6%. The S&P 500 ($SPX: 1,458.54, -17.08, -1.2%) fell 12.63 points, or 0.8%, to 1,462.99, while the Nasdaq Composite (COMP: 2,669.16, -79.60, -2.9%) fell 69.13 points, or 2.6%, to 2,679.63,” Gibson reports.
“Shares of Cisco (CSCO: 30.03, -2.72, -8.3%) shares fell 8.1%. Late Wednesday, the tech bellwether reported a 37% increase in first-quarter profit yet still sparked concern with a forecast implying that it won’t meet Wall Street expectations for the current quarter,” Gibson reports. “Cisco was pegged for sparking a decline in technology stocks at large.”
“Big losses in Google Inc. (GOOG: 691.13, -41.81, -5.7%) , Research in Motion Ltd. (RIMM: 121.42, -11.61, -8.7%) and Apple Inc. (AAPL: 174.50, -11.80, -6.3%) reflect an increase in risk aversion, on a global scale, as investors reassess their willingness to hold risky assets all the way from Shanghai to Wall Street,” said Frederic Ruffy, analyst at Optionetics,” Gibson reports.
“In prepared testimony to the Joint Economic Committee of Congress, Bernanke said the economy faces risks from the housing market’s slump as well as from a possible surge in inflation, the lower dollar and higher oil costs. Read The Fed,” Gibson reports. “Bernanke’s comments further fueled worries about the extent of the credit crunch and subprime-related mortgage problems plaguing banks and other financial institutions.”
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