Stocks trimmed losses by the close Thursday, but remained deep in the red, with techs falling after cautious outlooks from Qualcomm and Motorola. Ongoing worries about the labor market also gave investors a reason to retreat.
The Dow Jones industrial average (INDU) lost 115 points, or 1.1%, according to early tallies. The S&P 500 index (SPX) fell 13 points, or 1.2%. The Nasdaq composite (COMP) lost 42 points, or 1.9%. The Dow & S&P 500 closed at nearly three-month lows and the Nasdaq closed at a 2-month low.
Tech is getting smashed and that's spread to the rest of the market.
Thursday's selloff landed the markets in the red on the week, adding to last week's plunge, which was the Dow's worst since March 2009. The blue chips ended at their worst level since Nov. 5.
Tech stocks tumble:
The market's drop Thursday also came in response to a report from Standard & Poor's that said it no longer considers Britain's banking system among the "most stable and low-risk." The report added to recent concern about rising debt levels in countries such as Greece and drove the dollar higher as investors sought safety. That sent some commodities prices lower.
Later in the day, Fed Chairman Ben Bernanke was confirmed for a second term after heavy lobbying by Democrats and the Obama administration.
Worries that Bernanke's term might not be renewed were among the factors that roiled markets last week. But concerns about the Obama administration's plans to impose greater regulations on banks and China's lending curbs really drove the selling, sending the major gauges down 5% in three session.
Some lawmakers have criticized Bernanke for lax bank regulation prior to the financial crisis, and 30 voted against his confirmation.
“A reappointment of Bernanke is good for the market,” said Michael Nasto, the senior trader at U.S. Global Investors Inc., which manages about $2.5 billion in San Antonio. “It means less uncertainty. That’s what we need during this phase when the economy is recovering.”
In the commodity markets, crude oil and gold inched lower amid a stronger U.S. dollar. Crude fell 3 cents a barrel, or 0.04%, to $73.64. Gold sank 90 cents a troy ounce, or 0.08%, to $1084.80.