Technology stocks falling for 2nd day in a row

Friday, April 11, 2014, Vol. 38, No. 15

NEW YORK (AP) — Technology stocks are dropping for a second day in a row as investors flee highflying Internet and biotechnology companies. Weaker earnings at JPMorgan Chase are dragging bank stocks lower in late afternoon trading, helping to push all three major indexes lower.

KEEPING SCORE: The Nasdaq composite index dropped 44 points, or 1.1 percent, to 4,010 as of 3:23 p.m. Eastern time. The Standard & Poor's 500 fell 11 points, or 0.6 percent, to 1,821. The Dow Jones industrial average fell 96 points, or 0.6 percent, to 16,076.

TECH TURMOIL: Information technology stocks in the S&P 500 fell 1 percent, the second worst drop among the 10 industry groups that make up the index. The worst was consumer discretionary stocks, down 1.2 percent.

Earlier in the day, some stocks that had been crushed when Nasdaq's plunged on Thursday staged a comeback. But they reversed course later in the day. Facebook, after rising earlier in the day, fell $1, or 1.7 percent, to $58.16.

The Nasdaq dropped 3.1 percent on Thursday, the biggest fall since 2011. It is heading for its third straight weekly loss and is down 8 percent from the recent peak it reached five weeks ago.

BANK EARNINGS: JPMorgan Chase fell $1.87, or 3 percent, to $55.53 after the bank missed analysts' earnings estimates. The nation's biggest bank by assets said its earnings fell 20 percent in the first quarter as revenue from bond trading and mortgage lending fell.

"They're just struggling to grow, and then they didn't have the strength out of the investment bank to help offset that," said Shannon Stemm, financial services analyst for Edward Jones. "All around, it's just a lackluster quarter for them."

Wells Fargo rose 67 cents, or 1.4 percent, to $48.38 after it beat earnings estimates.

RETAILER ROUT: Gap fell 98 cents, or 2.5 percent, to $38.31. The San Francisco-based company, which owns the Gap, Banana Republic and Old Navy brands, said revenue for stores open at least a year fell 6 percent.

EARNINGS FEARS: Adding to jitters over tech, investors have grown skeptical that corporate earnings across industries will rise enough to drive stocks higher after the S&P 500 gained nearly 30 percent last year. Financial analysts expect first-quarter earnings S&P 500 companies to drop 1.6 percent from a year earlier, according to a report released Friday from FactSet, a financial data provider. At the start of the year, they expected a jump of 4.3 percent.

If profits do fall, it would be only the second quarterly drop in three years.

THE QUOTE: "Earnings are going to come in on the sloppy side, but I don't see a correction beyond eight percent," says Peter Cardillo, chief market economist at Rockwell Global Capital.

IPO STAR: Zoe's Kitchen, a restaurant chain, soared 67 percent in its trading debut. The stock gained $10.10 to $25.10.

SKIDDING: General Motors dropped $1.18, or 3.5 percent, to $32.12 after saying it must fix a second ignition part in compact cars it is recalling for switch problems. It said the additional fix will raise its first-quarter recall costs above $1 billion.

BONDS: Treasury prices rose. The yield on the benchmark 10-year Treasury note fell to 2.62 percent from 2.65 percent late Thursday.