Absent significant economic news to provide direction, investors cashed in.
With the Federal Reserve Open Market Committee expected to lower interest rates Wednesday and no significant economic news to provide direction, investors were on their own Monday, and they cashed in.
"The market has been extended," Richard Dickson, senior market strategist at Lowry's Research Reports, told The Associated Press. "You have some people saying, 'I am not going to wait for the [Fed's] news to come out, I'm just going to book profits now.'"
Techs led the retreat. Our InformationWeek 100 index of technology stocks fell 6.66 points, or 2.6%, to 245.48. The Nasdaq index fell nearly 2.1%, or 33.9 points, to 1,610.82. The Dow Jones fell 127.8 points, or 1.4%, to 9,072.95. And the Standard & Poor's 500 fell 14.05 points, or 1.4%, to 981.64.
"What we have seen is a broadening out of [investors'] appetite for equities, but only to a certain price. ... Now we see investors being more discriminating," Joseph Battipaglia, chief investment officer at Ryan, Beck & Co., told AP. "That is what normally happens when you have such big moves higher." He added that he thinks the market's direction remains positive and investors' mood continues to be upbeat. Analysts said they were pleased to see the market give back some of its gains, having worried that stock prices were soaring out of control given the still-difficult economic conditions. "The market is being very healthy. Investors are looking at the prospect for earnings very rationally," Battipaglia said.
The Nasdaq-100 Index tracking stock closed down 58 cents, or 1.9%, at $29.73 a share on volume of 81.2 million shares. Even so, some tech companies flexed some muscle.
Echelon (ELON) jumped 4.8% after revealing a strategic agreement in which Samsung Electronics Co. will adopt Echelon transceivers and platforms to be used to provide connectivity for Samsung's Home Vita alliance to network appliances such as air conditioners, lights, and refrigerators over the Internet.
PeopleSoft (PSFT) increased 2.5%; the enterprise software maker is being pursued by Oracle.
Though many retail booksellers' share values fell because of heavy discounts for the latest Harry Potter book, not so for Amazon.com (AMZN), which saw its stock rise 1.5%. Amazon said its orders for Harry Potter And The Order Of The Phoenix topped 1.3 million, the largest sales and distribution event in E-commerce history.
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