(Updates to mid-afternoon)
By Caroline Valetkevitch
NEW YORK, Jan 23 (Reuters) - U.S. stocks fell for a sixth
session on Wednesday, led by the Nasdaq's drop of more than 2
percent as profit forecasts from Apple Inc <AAPL.O> and
Motorola <MOT.N> fanned worries about a recession and the
outlook for tech.
For the second day, the Nasdaq crossed the threshold that
signals a bear market.
By mid-afternoon, though, all three major indexes had
sharply pared some of their earlier losses, with the financial
sector providing a bright spot. The S&P financial index <.GSPF>
was up 3.2 percent.
Energy stocks were among top decliners, including Exxon
Mobil Corp. <XOM.N>, down 3.5 percent at $79.58. Standard &
Poors Equity Research said it had cut its energy sector
outlook. The S&P energy sector index <.GSPE> was down 4
percent.
After Tuesday's closing bell, Apple forecast a quarterly
profit below analysts' expectations and reported disappointing
holiday-season iPod shipments. For details, see
[]. Apple's stock sank 15.3 percent to $131.80 on
the Nasdaq.
"It's a trend that's been in existence for a while. It's a
concern of a recession, and the markets are going to move to a
level that will start to discount a recession before it even
apears," said Steve Goldman, market strategist at Weeden & Co.,
in Greenwich, Connecticut. "When it starts to appear, it will
be discounted."
The Dow Jones industrial average <> was down 77.22
points, or 0.65 percent, at 11,893.97. The Standard & Poor's
500 Index <.SPX> was down 12.08 points, or 0.92 percent, at
1,298.42. The Nasdaq Composite Index <> was down 49.94
points, or 2.18 percent, at 2,242.33.
Earlier, the Dow and S&P were down more than 2 percent
each, while the Nasdaq had fallen more than 3 percent.
The news from Apple, Motorola and others underscored
concerns about the health of the U.S. consumer.
Mobile phone maker Motorola Inc <MOT.N> forecast a loss for
the current quarter and said it expects a challenging
year.[]. Motorola shares lost 18.8 percent to $10
and ranked among the biggest percentage losers on the New York
Stock Exchange.
On the plus side were financial companies, which gained for
a second day after the Federal Reserve slashed interest rates
by 75 basis points in an emergency move to forestall a
recession.
Bank of America Corp <BAC.N> jumped 6.6 percent to $39.86
and was among the S&P 500's top advancers, a day after
reporting a 95 percent drop in its quarterly profit due to
write-downs, trading losses and credit losses. The company,
which owns the second-largest U.S. bank, however, also said it
planned to raised capital in the near future.
The Nasdaq crossed the threshold of a bear market, which is
defined as falling 20 percent or more from a recent closing
high. But to confirm the onset of a bear cycle, a prolonged
period in which investment prices fall, the index needs to end
at least 20 percent off its closing peak.
Both the S&P 500 and Dow were also near bear market
levels.
(Editing by Jan Paschal)
