New York – Stocks plunged Wednesday as a broker’s downgrade of Dell Inc. and higher oil prices aggravated Wall Street’s worries about a shaky start to second-quarter earnings. The Dow Jones industrial average sank more than 121 points.
An analyst’s reduced outlook for Dell drove concerns about the impact of a slowing economy on tech companies, whose shares led the broader market lower and gave the Nasdaq composite index its biggest one-day drop in a month. Meanwhile, rising oil prices intensified the market’s inflation jitters.
“We’re not out of the inflation woods yet,” said Sam Sto vall, chief investment strategist with Standard & Poor’s U.S. equity research.
The Energy Department reported that oil inventories dropped by a larger-than-expected amount last week. The news sent crude-oil futures up 79 cents a barrel to settle at $74.95 on the New York Mercantile Exchange.
Wednesday’s slump was another in the recent string of wildly erratic sessions on Wall Street. Investors have been cautious about trading amid fears that rising energy prices could bring more interest-rate hikes at a time when the economy already appears to be cooling off.
At the close, the Dow tumbled 121.35, 1.09 percent, to 11,013.42. The Dow was down almost 139 points earlier.
Broader stock indicators also dropped sharply. The S&P 500 index fell 13.92, 1.09 percent, to 1,258.60, and the Nasdaq fell 38.62, 1.81 percent, to 2,090.24.
Decliners led advancers by more than 2 to 1 on the New York Stock Exchange.
Bonds stayed flat, with the yield on the 10-year Treasury note unchanged at 5.11 percent from late Tuesday. However, a recent bond rally showed many investors were attracted by rising returns as well as the perception that they are less risky than stocks.
Elsewhere, the U.S. dollar was higher against the Japanese yen and barely changed against European currencies. Gold prices rose to more than $650 an ounce.
