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.
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.
U.S. crude oil for December delivery CLZ7 lost $1.70, or 1.8 percent, to settle at $94.62 a barrel on the New York Mercantile Exchange. Oil futures prices dropped following news that Saudi Arabia said OPEC will discuss an increase in production at a meeting this coming weekend.
Even so, Citigroup Inc (C.N) led banks higher, with Citi finishing up 1.4 percent at $33.57 on the NYSE as investors scoured the downtrodden sector for bargains.
Citigroup’s advance also followed comments by Chairman Robert Rubin to the Financial Times that any successor to Chief Executive Charles Prince would face “no strategic constraints.” The newspaper said this could make a break-up of Citigroup more likely. For details, see <ID:nN12446080>.
Still, Kiddoo said “the rebound in the financial sector looks more tentative than definitive because “there’s still going to be a couple of more shoes to drop” in terms of write-downs.
The financial sector notched its first three-day string of positive days since early October. Financial shares have been among the hardest hit in recent weeks as disclosures and talk of write-downs from risky loans have worried investors about credit market problems.
An S&P financial index .GSPF gained 0.2 percent.
International Business Machines Corp (IBM.N) bucked the downbeat tech sentiment. IBM’s shares rose 0.8 percent to end at $101.45 on the NYSE after the technology services company said it would buy Canada’s Cognos Inc CSN.TOCOGN.O for $5 billion, snapping up the last major independent maker of business intelligence software. <ID:nN12447175>
Trading was below average on the New York Stock Exchange, with about 1.71 billion shares changing hands, below last year’s estimated daily average of 1.84 billion. On Nasdaq, about 2.85 billion shares traded, ahead of last year’s daily average of 2.02 billion.
Declining stocks outnumbered advancing ones by a ratio of about 2 to 1 on the NYSE and by 3 to 2 on Nasdaq.
Editing by Jan Paschal