Stocks fell yesterday as profit-taking and a return of corporate profit worries ended a week-long equities rally that was kicked off last week by the Federal Reserve's fifth interest-rate cut this year.
The Dow Jones industrial average fell 151.73 points to 11,105.51. The Nasdaq Composite Index dropped 67.80 points to 2,246.05. The benchmark Standard & Poor's 500 index fell 19.99 points to 1,289.39.
"There isn't much on the horizon that would point to improving earnings in the near future, said Edgar Peters, chief investment officer at PanAgora Asset Management , which manages $15 billion.
"There is going to be some improvement, but not to a level that would justify this run-up," he added. "There is some entrenchment going on. People realise they made some money and maybe should cash that in."
Setting the tone was a bearish report on the chip industry published by the trade group Semiconductor Equipment and Materials International, or SEMI. Orders from North American-based chip equipment companies plunged 41 per cent in April compared with March levels, while the book-to-bill ratio plummeted to 0.42, the worst in 10 years.
