Wall Street Sinks for 3rd Day!

Nov 10, 2007

Wall St sinks for 3rd day on tech, credit worries

NEW YORK - US stocks fell for a third session on Friday after a disappointing outlook from Qualcomm triggered more weakness in technology shares and helped send the Nasdaq down to its biggest weekly point loss since the Sept 11, 2001, attacks.
The wireless technology developer late on Thursday forecast 2008 earnings and revenue below analysts' expectations, a day after Cisco Systems warned about demand from its customers in the banking sector.

Adding to the negative tone, Fannie Mae, the largest source of mortgage financing in the United States, posted a third-quarter net loss that was double its loss from a year ago. Its shares ended the session down 1.6 per cent at US$49.00 (S$70.95), after earlier dropping 10.6 per cent to a fresh 52-week low at US$44.54.

And Wachovia Corp, the fourth-largest US bank, shook up financial markets some more by reporting a potential US$1.7 billion loss on mortgage-related debt. Wachovia's stock fell more than 5 per cent to a 52-week low at US$38.05, but then rebounded to finish the day up 0.9 per cent at US$40.65.

The week's disappointing news from tech companies sparked concern that fallout from the credit crisis was hurting demand from key customers. Technology until recently had been a bright spot for the market.

For the week, the Nasdaq lost 6.5 per cent - or 182 points. The Dow dropped 4.1 per cent and the S&P 500 declined 3.7 per cent.

Indices
For the day, the Dow Jones industrial average was down 223.55 points, or 1.69 per cent, at 13,042.74. The Standard & Poor's 500 Index was down 21.07 points, or 1.43 per cent, at 1,453.70. The Nasdaq Composite Index was down 68.06 points, or 2.52 per cent, at 2,627.94.

Qualcomm was among the bellwether tech stocks that led the Nasdaq lower with a decline of 4.2 per cent to US$38.10, while software maker Microsoft Corp fell 2.9 per cent to US$33.73.

Tech services company IBM was the Dow's top drag, down 5.2 per cent at US$100.64.

Meanwhile, the week closed with the first back-to-back gains in two weeks for financial stocks as investors scoured the downtrodden sector for bargains even after a fresh bout of credit loss revelations from some big banks, including Wachovia and Morgan Stanley.

Citigroup gained 0.6 per cent to close at US$33.10 on the NYSE, snapping a losing streak. Morgan Stanley advanced 1 per cent to end at US$54.20 on the NYSE.

Also bucking the trend, shares of mortgage insurers such as PMI Group surged, topping the list of the New York Stock Exchange's (NYSE) biggest percentage gainers, following news that Old Republic had acquired big stakes in two of the companies. PMI shares skyrocketed 33.9 per cent to US$14.88.

Trading was active on the NYSE, with about 1.83 billion shares changing hands, close to last year's estimated daily average of 1.84 billion. On Nasdaq, about 2.95 billion shares traded, ahead of last year's daily average of 2.02 billion.

Declining stocks outnumbered advancing ones by a ratio of about three to one on the NYSE and by two to one on Nasdaq. -- REUTERS