U.S. stocks fell on Thursday, with all major indexes down more than 1 percent on weakness in the technology and health insurance sectors.
Semiconductor stocks sank after Bank of America-Merrill Lynch cut its 2010 growth outlook for the industry, citing the potential for a correction in inventory levels.
BofA downgraded 10 stocks in the group, including Intel Corp
Tech and semis are one of the areas that have led the market, and now they're very over extended, said Alan Lancz, president of Alan B. Lancz & Associates in Toledo, Ohio. Investors are asking if they believe the rally and whether we've moved up too fast.
Dow component Intel fell 5.3 percent to $19.05, while Marvell sank 6.2 percent to $15.08, and Texas Instruments lost 4 percent to $24.75. The Philadelphia Semiconductor index <.SOXX> dropped 4.1 percent.
The Dow Jones industrial average <.DJI> slid 132.64 points, or 1.27 percent, to 10,293.67. The Standard & Poor's 500 Index <.SPX> fell 17.24 points, or 1.55 percent, to 1,092.56. The Nasdaq Composite Index <.IXIC> tumbled 40.83 points, or 1.86 percent, to 2,152.31.
Health insurance stocks fell after U.S. Senate Majority Leader Harry Reid released a long-awaited healthcare reform plan on Wednesday that budget analysts said would extend coverage to tens of millions of the uninsured.
The Morgan Stanley Healthcare Payor index <.HMO> fell 1.5 percent, while Cigna Corp
The Conference Board said its index of leading economic indicators climbed a weaker-than-expected 0.3 percent to 103.8 in November.
Also on Thursday, the Philadelphia Federal Reserve Bank said its business activity index rose to a two-year high in November.
The Labor Department said the number of U.S. workers filing for jobless insurance was unchanged at a seasonally adjusted 505,000 in the week ended November 14, as expected.
(Editing by Jeffrey Benkoe)