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Saturday July 19, 1:05 AMNasdaq, S&P fall on tech sell-off, Dow flat
Financial stocks continued to rebound, however, after No.1 U.S. bank Citigroup reported a smaller-than-expected quarterly loss, giving the sector a lift for the third straight session and helping limit losses in the Dow. Microsoft shares fell more than 7 percent, and the software maker was a top drag on both the Dow and the S&P 500, while shares of Google slid more than 9 percent, making it the top drag on the Nasdaq. Bucking the tech earnings trend, computer services company IBM reported a 22 percent rise in profit, lifting its shares 2 percent and helping prevent the Dow falling further. "It's a normal consolidation after two very strong days which were marked primarily by a lot of short covering in the financials," said Fred Dickson, market strategist at D.A. Davidson & Co in Lake Oswego, Oregon. Dickson said Google is a "key leadership stock" and as such is subject to heavy selling in the event of an earnings shortfall. The Dow Jones industrial average declined 11.07 points, or 0.10 percent, to 11,435.59. The Standard & Poor's 500 Index fell 5.91 points, or 0.47 percent, to 1,254.41. The Nasdaq Composite Index lost 38.29 points, or 1.66 percent, to 2,274.01. The Dow gained nearly 500 points Wednesday and Thursday as stronger-than-expected bank results allayed fears about the health of the U.S. banking system on the heels of a government takeover of California-based mortgage lender IndyMac. Oil prices rose on Friday, reversing three days of declines and providing another hurdle for stocks. Shares of Google, the Internet search company, fell to $484.28 on Nasdaq after the company posted a smaller-than-expected 35 percent rise in net profit. Microsoft shares slid to $25.40 after the software maker gave a forecast below Wall Street's expectations. Other tech decliners were iPod maker Apple Inc , down 3 percent at $165.56, and Advanced Micro Devices Inc , down 12 percent to $4.65 after reporting a larger-than-expected quarterly loss. Shares of International Business Machines Corp, however, rose 2.5 percent to $129.64. Citigroup jumped more than 10.4 percent to $19.83 after the Dow component reported a smaller-than-expected $2.5 billion loss and said it would keep cutting costs and getting rid of risky or poorly performing assets. The positive news from Citi was a sharp contrast to disappointing news of a larger-than-expected quarterly loss from Merrill Lynch , whose stock fell more than 2 percent to $30.01. After declining about $15 in three days, oil prices turned higher on Friday, rising 0.9 percent to $130.43 a barrel. (Additional reporting by Ellis Mnyandu; Editing by James Dalgleish) |
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