Tech stocks get no relief
The major indexes and technology stocks continue their sinking motion throughout the trading day. Dwindling corporate profits and economic data weigh heavily on investors.
The Nasdaq slumped 77.59 to 2,044.07 , while the Dow Jones Industrial Average was off 181.49 to 10,690.13. The broader markets were hurt on concerns that the European Commission will derail General Electric's acquisition of Honeywell.
"Traders think things look bleak; the only thing that lifts the market now is when sellers go to the bathroom," Bear Stearns research said in a market update from traders Thursday.
On the economic front, U.S. business inventories held steady in April as sales dipped for a second straight month, the Commerce Department said in a report released Thursday.
While sales fell 0.5 percent in April to $833.8 billion, inventory levels remained at $1.19 trillion. That was in line with economists' expectations.
U.S. inflation at the wholesale level was tame in May, offering reassuring news for Federal Reserve policy makers who will meet later this month to consider cutting interest rates. The Labor Department reported that the Producer Price Index, which measures prices paid to businesses for ready-to-sell goods such as clothing and gasoline, inched up 0.1 percent last month after a 0.3 percent rise in April.
"Perhaps stocks have figured out that although today's data clears the way for the Fed to ease 25 basis points or more, that this is a small consolation against the stock-specific problems we are weathering today," said Bear Stearns' report.
In Washington, D.C., a congressional committee examined allegations of bias and inflated analyst recommendations. In written testimony, Securities Industry Association President Marc Lackritz said there was a big difference between analysts making a wrong projection and being influenced by their firms' business. Earlier this week, the SIA issued a set of "best practices" for Wall Street firms in an effort to assuage concerns.
In the tech sector, the focus was clearly on dwindling profits. Among the CNET tech indexes, semiconductors and semiconductor equipment, server hardware, storage, and telecom equipment each fell 3 percent or more.