U.S. stocks fell for a third straight day on Friday as investors took weaker-than-expected results from computer maker Dell
Following the S&P 500's gain of more than 60 percent from its 12-year closing low of March 9, investors have become more sensitive to signs of weakness as they sought to justify lofty share valuations.
While it appears to us that the recession is over, there are a lot of lingering signs of pain on Main Street, said Sasha Kostadinov, portfolio manager and research analyst at Shaker Investments in Cleveland, Ohio. Unemployment is very high, lots of people out of work and that is still causing significant stress.
The news of a 54 percent slide in Dell's quarterly profit rounded off a rocky week for the technology sector, which has been a market darling since March as investors bet on a strong recovery to spur corporate and consumer spending.
Unease about the economy's prospects drove investors to snap up defensive stocks seen better able to withstand an uncertain economy, limiting the Dow's losses.
The Dow Jones industrial average <.DJI> fell 14.28 points, or 0.14 percent, to 10,318.16. The Standard & Poor's 500 Index <.SPX> dropped 3.52 points, or 0.32 percent, to 1,091.38. The Nasdaq Composite Index <.IXIC> slipped 10.78 points, or 0.50 percent, to 2,146.04.
For the week, the Dow rose 0.5 percent, the S&P 500 fell 0.2 percent and the Nasdaq shed 1 percent. Trading was choppy with the monthly expiration of November options on Friday.
With the year-end fast approaching, there was also a push by some investors, including hedge funds, to lock in profits from the recent rally going into 2010, analysts said.
Dell, the No. 3 personal computer maker, slid 10 percent to $14.29 a day after it reported a sharp drop in third-quarter profit and sales that missed estimates. Dell was the Nasdaq's top drag.
D.R. Horton Inc
A rebound in the U.S. dollar pressured prices of global commodities, including crude. Energy stocks were hurt, such as Chevron Corp
On the New York Mercantile Exchange, December crude settled down 74 cents, or 0.96 percent, at $76.72 a barrel, the last day of the contract.
Even so, the Dow's losses were curbed by buying of defensive stocks, or shares of companies seen better able to withstand an uncertain economy. Coca-Cola Co
Dow component General Electric Co
GE shares shed 1.1 percent to $15.59.
Goldman Sachs Group Inc
The S&P 500 is up 61.3 percent from the 12-year closing low of March 9, but with Friday's losses the benchmark index broke a two-week winning streak.
(Editing by Kenneth Barry)