Technology and basic materials shares led Wall Street's broad decline on Thursday, as bearish analyst comments on the semiconductor sector and a stronger U.S. dollar dented recent gains.
Bank of America-Merrill Lynch cut its 2010 growth outlook for the semiconductor industry, and downgraded 10 stocks, including Intel Corp
Dow component Intel fell 5.5 percent to $19.02, and the Philadelphia Semiconductor index <.SOXX> dropped 4 percent.
Energy shares <.GSPE> slid 2.1 percent as U.S. crude futures fell on the stronger U.S. dollar and doubts about the pace of demand recovery in the United States. The rising greenback hurt other commodities, and the S&P materials sector <.GSPM> tumbled 2.5 percent.
The Dow Jones industrial average <.DJI> fell 136.19 points, or 1.31 percent, to 10,290.12. The Standard & Poor's 500 Index <.SPX> dropped 17.87 points, or 1.61 percent, to 1,091.93. The Nasdaq Composite Index <.IXIC> lost 43.09 points, or 1.96 percent, to 2,150.05.
Today's move does have to do with recent gains and profit taking, said Ralph Fogel, investment strategist at Fogel Neale Partners in New York. There is some sort of consolidation, even though there is an uptrend that is still on.
Through Wednesday's close, the S&P 500 index was up 64 percent from its March lows and 7.1 percent so far this month.
Health insurance stocks fell a day after U.S. Senate Majority Leader Harry Reid released an $849 billion healthcare reform bill that analysts said would extend coverage to tens of millions of the uninsured.
Goldman Sachs said in a note the bill may cause problems for managed-care companies regarding profit margin regulation.
The Morgan Stanley Healthcare Payor index <.HMO> fell 2.4 percent.
Shares of homebuilders fell broadly, with the Dow Jones home construction index <.DJUSHB> down 3.2 percent. Lennar Corp
The Mortgage Bankers Association said the delinquency rate on small homes rose to a 37-year high in the third quarter. Higher delinquencies could translate into more foreclosures and added inventory in the housing market.
A batch of other economic data was released Thursday. The Conference Board said its index of leading economic indicators climbed less than expected in November.
The Philadelphia Federal Reserve Bank said its business activity index rose to a two-year high in November.
(Editing by Jeffrey Benkoe)