Mar. 20, 2009 (Investor's Business Daily) -- Stocks stumbled to new session lows in afternoon trading Friday, with techs leading the downside action.
The Nasdaq dropped 1.8%, slipping back below its 50-day moving average. Chip issues cracked after a preliminary report from Semiconductor Equipment and Materials International said orders from North American chip-equipment makers fell 5%. The Philadelphia Semiconductor index shed 2.8%.
The NYSE composite and S&P 500 lost 1.6% each, while the Dow fell 1.1%.
Turnover continued to track higher on the NYSE. But despite options expiration, volume was again lower on the Nasdaq.
Lam Research (LRCX) turned tail and dropped 5%. Late Thursday, the chip-gear maker said it would cut 375 more jobs. That's on top of 600 jobs lost in November.
Starent Networks (STAR) reversed early gains and tumbled 8% in heavy trading. But that's up from a near-12% loss at session low. C.L. King started coverage of the infrastructure firm with a neutral rating.
ResMed (RMD) dropped 5% to a four-month low. This medical device maker is on track for its fifth weekly decline in the past six weeks.
1:15 p.m. Update: Indexes Shift Into Red; Volume Falters
BY ALAN R. ELLIOTT
Indexes slid fully into losses, and volume eased following comments from Federal Reserve Chief Ben Bernanke to a group of community bankers gathered in Phoenix.
Volume fell from early highs, but remained positive on the NYSE. It dropped below Thursday's levels on the Nasdaq. Decliners led advancers by 3-to-2 on the NYSE and by about 4-to-3 on the Nasdaq.
Bernanke told the community banking conference that the Fed was so far pleased with the reaction to its $1 trillion in additions to stimulus spending announced Wednesday, and that closer attention would be paid to future bank pay and bonus practices.
Regulators have realized that "poorly designed compensation policies can create perverse incentives that can ultimately jeopardize the health of the banking organization," Bernanke said in prepared remarks.
He also said that regulators would consider altering the current capital and accounting rules that amplify financial markets' volatility.
The dollar added to its early gains after Bernanke's comments. Crude futures held steady below $42 a barrel, and gold slipped another notch, down $4.60 to $954.20 an ounce.
Terra Nitrogen (TNH) perked up 2% in solid trading, continuing a third straight day of gains. The fertilizer producer is in the seventh week of a cup base, but that base is 22% below the stock's 52-week high a sign of weakness.
On the downside, FedEx (FDX) slipped 6% in heavy trading. The air freight operator reported Thursday its Q4 earnings fell far shy of analyst views on a 14% decline in revenue. It offered Q1 guidance well below prior expectations.
DaVita (DVA) also dropped 6% in fast trading. The dialysis clinic operator has fallen in four of five recent weeks, damaging its attempt to climb the right side of a seven-month correction.
12:15 p.m.
