U.S. stocks end lower, techs and financials slide
By Richard Melville
"NEW YORK, May 24 (Reuters) - Wall Street stocks fell sharply on Monday, dragged by a sell-off in technology and financial issues after several influential analysts counseled trimming holdings in the sectors.
The Dow Jones Industrial Average fell 174.61 points or 1.6 percent to close unofficially at 10,654.67, with International Business Machines Corp. (NYSE:IBM - news) and Citigroup (NYSE:C - news) posting some of the heaviest losses.
The technology-laden Nasdaq Composite was hit even harder, falling more than 2.6 percent.
Given technology's sizzling gains since last October's market lows, analysts said it was not surprising that the group, along with
interest rate sensitive financials, has come under pressure now that bond market yields have spiked higher.
''Growth stocks like technology tend to be most vulnerable to the kind of rising interest rates we've been seeing,'' said Charlie Crane, chief market strategist at Key Asset Management. ''Rising interest rates are corrosive to valuations.''
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Underscoring worries about technology, Donaldson Lufkin & Jenrette analyst Thomas Galvin cut the weighting of technology and consumer cyclicals -- such as retailers and auto makers -- in his model portfolio early Monday, raising the weighting for consumer staples such as beverages and personal care products.
Among large cap tech stocks, IBM fell 6-5/8 to 223-3/4, Hewlett-Packard Co. (NYSE:HWP - news) fell 3-7/8 to 90 and
Dell Computer Corp. (Nasdaq:DELL - news) dipped 1-3/16 to 36-1/8, extending its slide in the wake of reporting earnings last week.
Internet stocks also slumped with America Online Inc. (NYSE:AOL - news) down 7-5/16 to 119-1/8, Yahoo Inc.(Nasdaq:YHOO - news) down 13-7/16 to 137-7/8 and venture capital company CMGI Inc. (Nasdaq:CMGI - news) down 20-11/16 to 211-1/16.
''We continue to see many investors rotating out of the sector as they have done since the end of the last quarter,'' said Bob Walberg, an analyst with Briefing.com in Chicago." |
