U.S. Stocks Tally Second Day Of Losses As Technology Weigh

NEW YORK (MarketWatch) -- U.S. stocks on Thursday extended losses into a second day, with technology shares under pressure as a result of disappointing numbers from Oracle Corp. and Google Inc.

"On the tech side, we have two negative points with the numbers out of Oracle and Google," said Owen Fitzpatrick, head of U.S. equities at Deutsche Bank. "We're starting to see some softness in there, but it's not a big slide."

And, the rising price of crude "is helping the energy sector but not the rest of the market," Fitzpatrick said.

The Dow Jones Industrial Average was down 120.40 points, or nearly 1%, to 12,302.46, with all but two of its 30 components posting losses.

Decliners on the Dow included technology issues, with Hewlett-Packard , IBM , Intel and Microsoft all settling with declines.

The S&P 500 index eased 15.37 points, or 1.2%, to 1,325.76, while the Nasdaq Composite slumped 43.53 points, almost 2%, to 2,280.83.

Major U.S. investment banks and broker-dealers submitted bids for 28-day loans of $86.1 billion of Treasurys from the Federal Reserve's new term security lending facility on Thursday, with the Fed accepting $75 billion, for a bid-to-cover ratio of 1.15.

"It's a very important auction as it's the first time they broadened all the assets they accepted. But I didn't see any major market reaction to it," said Ken Tower, chief market strategist at Covered Bridge Tactical.

On a positive note, a Texas judge ordered banks to fund the proposed $19 billion buyout of radio broadcaster Clear Channel Communications by two private-equity firms. Clear Channel's shares rallied 11.3%, recovering much of the heavy losses they suffered Wednesday.

Trading volume topped 3.9 billion shares on the New York Stock Exchange, where decliners outpaced gainers by 5 to 3. On the Nasdaq, 2 billion shares traded, and decliners topped gainers by 3 to 2.

By sector, biotechnology , pharmaceuticals , and utilities advanced, while banks , broker/dealers and technology led the way lower.

Data boost

Easing recent concerns about the extent of the slumping U.S. economy, the Commerce Department said its 0.6% estimate for growth in gross domestic product was unrevised from the previous two estimates.

Meanwhile, first-time claims for state unemployment benefits for the week ended March 22 fell 9,000 to stand at 366,000, the Labor Department reported.

Besides Thursday's economic releases, a number of Federal Reserve officials were making remarks.

Crude for May delivery was up $1.68, or 1.6%, to settle at $107.58 a barrel on the New York Mercantile Exchange, while gold futures slipped 40 cents to end at $948.80 an ounce.

U.S. stocks dropped on Wednesday, with worries over a decline in durable-goods orders and worries that the long-pending Clear Channel deal had hit a roadblock combining to hit stocks. The Dow industrials lost 109 points, the Nasdaq Composite shed 16 points and the S&P 500 fell 11 points.

Techs slump

Among the companies in Thursday's spotlight, Oracle shares fell after the business-software giant reported a slower-than-forecast 21% revenue rise for the third quarter, with profit increasing 30%.

Rival SAP also saw its U.S.-listed shares drop.

Also on the tech front, paid clicks for Internet search giant Google had a second month of disappointing growth, according to a comScore Inc. study. Lehman Brothers kept an overweight rating, though it lowered its Google price target to $580 from $644.

"We believe Google is being impacted by: macro effects on consumer clicking activity and potentially advertiser budgets; enhanced quality initiatives; and a slowdown in overall search traffic," the broker said.

Also on the move, Rambus saw its shares erase early gains. A jury found the chipmaker not guilty of fraud or violating antitrust laws in dealing with an industry group that st technology standards for dynamic random access memory, or DRAM, chips in the 1990s.

Financial shares were mixed. Fresh off slashing estimates for a number of banks including Citigroup, Oppenheimer & Co. analyst Meredith Whitney cut estimates for Merrill Lynch and UBS .

Elsewhere, shares of General Electric rose 0.3%. The company said it had reached separate deals with American Express and Banco Santander , getting $1.1 billion in cash and an Italian banking operation in return for selling its corporate card business and various European personal finance units.

Children's Place said its Hoop Holdings division filed for Chapter 11 bankruptcy as it seeks to sell more of its Disney Store business to Walt Disney Co. . Hoop designs, contracts to produce, and sells merchandise under the Disney Store brand name via a license from Walt Disney.

The Nikkei 225 closed 0.8% lower in Tokyo while the FTSE 100 rose 0.8% in London.

By Nick Godt