Market drops on techs and oil, as E*Trade punished

By Ellis Mnyandu

NEW YORK (Reuters) - U.S. stocks fell for a fourth session on Monday, led by a widening sell-off in technology stocks late in the day on worries about business spending, while a drop in oil prices hit energy producers' shares.

Persistent concerns about the potential for more credit losses also took the wind out of an attempted recovery in the shares of financial services companies in the last hour of the session, causing the Dow to reverse an earlier advance.

The day's biggest decliners represented a "Who's Who" of the year's best performers, including Apple Inc (AAPL.O) and Google Inc (GOOG.O), whose slide capped the Nasdaq's longest downward streak in three months.

"If the economy does slow down, many manufacturers and financial institutions, in particular, will not be upgrading their technical systems" and consequently, won't be buying a lot of tech supplies and tech support, said Ron Kiddoo, chief investment officer of Cozad Asset Management, in Champaign, Illinois.

"That seems to be the main reason tech is being beaten down."

The Dow Jones industrial average .DJI slid 55.19 points, or 0.42 percent, to end at 12,987.55.

It was the Dow's first finish below the 13,000 mark since early August.

The Standard & Poor's 500 Index .SPX fell 14.52 points, or 1.00 percent, to finish at 1,439.18. Monday's loss marked the S&P's longest losing in nine months. The Nasdaq Composite Index .IXIC tumbled 43.81 points, or 1.67 percent, to 2,584.13.

Trading was lighter than usual because bond markets in the United States were closed for the Veterans Day holiday.

The market's volatility was reflected in the CBOE Volatility Index .VIX, Wall Street's fear gauge, which rises when investors are uncertain or nervous about the economy and the market's direction. The VIX rose 9.1 percent to end Monday's session at 31.09 ahead of the upcoming November options expiration.

Apple shares finished down 7 percent at $153.76 on the Nasdaq, while shares of Google slid for the fourth straight day, ending down 4.8 percent at $632.07.

DARK DAY FOR E*TRADE

Online brokerage E*Trade Financial Corp. (ETFC.O), which plunged 58.7 percent -- its biggest one-day drop ever -- to close at $3.55 on Nasdaq. E*Trade's slide came after Citigroup downgraded the stock to "sell" and said investors cannot ignore the risk of possible bankruptcy. ID:nBNG268477.

The online brokerage said late on Friday it expects more write-downs in its asset-backed securities portfolios and would no longer meet previously issued earnings forecasts.

Shares of Exxon Mobil Corp (XOM.N) finished down 2.7 percent at $84.54 on the New York Stock Exchange, pressured by the biggest drop in crude oil prices in two weeks. The stock was the biggest drag on both the Dow and the S&P 500.