Tech stocks could get hit again Friday following a report from Dell Inc. that sales of its computers to big businesses remain sluggish. After the closing bell, the company posted quarterly revenue and profits that fell short of analysts' forecasts. Dell shares slid 6 per cent in after-hours trading.
As stocks fell, investors flocked to the dollar and Treasurys. The yield on the three-month T-bill, considered one of the safest investments, tumbled to its lowest level since December. The Chicago Board Options Exchange's Volatility Index, also known as Wall Street's fear gauge, rose more than 4 per cent.
Overseas markets also fell sharply.
The day's trade was a shift out of riskier assets and back into safe havens like the dollar and Treasurys. After amassing significant gains during an eight-month rally in stocks, investors are hesitant to take on too many risks as the year ends, worried that the economy's rebound might not be sustainable.
"Large money managers, going into the end of the year, are looking to protect their gains and are shifting assets," said Adam Gould, senior portfolio manager at Direxion Funds in New York.
For much of this year, investors have been selling dollars and putting their money in riskier assets like stocks and commodities that have the potential to earn higher returns.
Now, investors are wondering whether the dollar's slide has run its course and whether other markets have gotten overheated considering the many challenges to the economy including high unemployment.
Reports on the economy gave investors little incentive to hold on to stocks. Figures from the Labor Department indicated that employers are still shedding jobs, and the Mortgage Bankers Association reported a surge in foreclosures.
The government said the number of newly laid-off workers seeking unemployment insurance was unchanged last week at 505,000. The figure remains above the level that would indicate the economy is adding jobs.
Meanwhile, a private group's forecast of economic activity rose less than expected in October, signaling slow growth next year. The Conference Board said its index of leading economic indicators, which forecasts activity over the next six months, rose 0.3 per cent last month.
The market's losses added to a modest slide Wednesday that followed a drop in home construction and worse-than-expected forecasts from technology companies.
Tech shares fell again after chipmakers, including Intel Corp., were downgraded.
"If a company like Intel isn't going to do as was well as people think, then that has many ripple effects," said Gould of Direxion Funds.
As stocks fell, investors flocked to the dollar and Treasurys. The yield on the three-month T-bill, considered one of the safest investments, tumbled to its lowest level since December. The Chicago Board Options Exchange's Volatility Index, also known as Wall Street's fear gauge, rose more than 4 per cent.
Overseas markets also fell sharply.
The day's trade was a shift out of riskier assets and back into safe havens like the dollar and Treasurys. After amassing significant gains during an eight-month rally in stocks, investors are hesitant to take on too many risks as the year ends, worried that the economy's rebound might not be sustainable.
"Large money managers, going into the end of the year, are looking to protect their gains and are shifting assets," said Adam Gould, senior portfolio manager at Direxion Funds in New York.
For much of this year, investors have been selling dollars and putting their money in riskier assets like stocks and commodities that have the potential to earn higher returns.
Now, investors are wondering whether the dollar's slide has run its course and whether other markets have gotten overheated considering the many challenges to the economy including high unemployment.
Reports on the economy gave investors little incentive to hold on to stocks. Figures from the Labor Department indicated that employers are still shedding jobs, and the Mortgage Bankers Association reported a surge in foreclosures.
The government said the number of newly laid-off workers seeking unemployment insurance was unchanged last week at 505,000. The figure remains above the level that would indicate the economy is adding jobs.
Meanwhile, a private group's forecast of economic activity rose less than expected in October, signaling slow growth next year. The Conference Board said its index of leading economic indicators, which forecasts activity over the next six months, rose 0.3 per cent last month.
The market's losses added to a modest slide Wednesday that followed a drop in home construction and worse-than-expected forecasts from technology companies.
Tech shares fell again after chipmakers, including Intel Corp., were downgraded.
"If a company like Intel isn't going to do as was well as people think, then that has many ripple effects," said Gould of Direxion Funds.
Intel lost 4.1 per cent, sliding 82 cents to $19.30. Texas Instruments Inc. fell 87 cents, or 3.4 per cent, to $24.88, while Advanced Micro Devices Inc. fell 27 cents, or 3.7 per cent, to $7.05.
Five stocks fell for every one that rose on the New York Stock Exchange, where consolidated volume came to 4.3 billion shares, in line with Wednesday.
Overseas, Britain's FTSE 100 fell 1.4 per cent, Germany's DAX index lost 1.5 per cent, and France's CAC-40 slid 1.8 per cent. Earlier Thursday, Japan's Nikkei stock average fell 1.3 per cent.
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