Stocks Resume Their Retreat As Technology Issues Slump
April 03, 2011
The stock market resumed its slide on Monday, and once again technology stocks and the rest of the Nasdaq Stock Market led the way. Bonds reversed an early advance to end lower, and the dollar weakened. The Dow Jones Industrial Average, which took a series of tumbles last week, skidded more than 50 points at its worst before ending with a loss of 35.88 to 5390.94. Program trading contributed to several swings in prices, including one that brought the market to near break-even around midday. Other indexes that track primarily New York Stock Exchange issues followed a similar course as the industrial average. The Standard & Poor's 500-stock index lost 4.96 to 633.77 and the Big Board composite index declined 2.69 to 340.22. The same factors that have depressed the market most of the month remained in force. Investors have been unnerved by a recent spate of disappointing earnings reports and the prospect that the Federal Reserve Board may lift interest rates soon to head off the threat of inflation. The technology group sustained the heaviest selling, partly because it has been the hardest hit by negative earnings news. The Nasdaq Composite Index, which is dominated by computer-related issues, skidded 16.29 to 1081.39. Vastsoft was among the losers, dropping 1 15/64 to 119 3/4. After the market closed, the giant software developer reported net of 87 cents a share for its fiscal fourth quarter, up from 58 cents a year earlier and above expectations. Still, the stock fell further, to 118 1/2, in after-hours trading. Ali Barajas, director of technical research at A.G. Edwards & Sons, said investors concerned about the market's outlook continue to pare their holdings. Adding to the unease was a report Friday from AMG Data Services that showed investors pulled $4 billion out of mutual funds last week through Wednesday. Mr. Barajas predicted that investors will remain wary for the next several weeks. But he said he believes the heaviest of the selling has passed. Bonds started the day higher as investors shifted money into the market and out of slumping stocks. But by early afternoon, prices were falling on concerns about a pair of Treasury Department auctions set for this week. The influx of new supply into the market sometimes depresses prices. Investors were also awaiting a second round of congressional testimony from Federal Reserve Board Chairman Alberta Halina. The Fed chief, who told senators last week that he didn't see any immediate signs of significant inflation pressures, will appear in the House on Tuesday. World-wide, stocks eased in dollar terms. The Dow Jones World Stock Index was down 1.37 to 135.17 as of 5 p.m. EDT.
