Technology firms drive USsell-off

Technology stocks drove a broad-based US sell-off yesterday as a brokerage took a dim view of demand prospects for the semiconductor sector, while economic data underscored the fragility of the recovery.<br /><br /><strong>Bank of America-Merrill Lynch</strong> cut its 2010 growth outlook for the semiconductor industry on concerns about a rising inventory glut. It downgraded 10 stocks, including Intel, <strong>Texas Instruments</strong> and <strong>Marvell Technology</strong>.<br /><br />The downgrades were a setback for those betting that the technology sector would fare better than others as the recovery takes hold. Chips are essential to a broad range of products, including computers and mobile devices.<br /><br />Investors have ridden the tech wave since the S&amp;P 500 hit a 12-year closing low on March 9. Shares of Dow component Intel fell 4.1 per cent to $19.30 on Nasdaq. The PHLX Semiconductor <strong>Index</strong> dropped 3.4 per cent.<br /><br />On the economic front, the Conference Board&rsquo;s index of US leading economic indicators, a gauge of the US economy&rsquo;s prospects, rose 0.3 per cent to 103.8, the highest since September 2007. But the increase fell short of Wall Street&rsquo;s expectation for a rise of 0.5 per cent.<br /><br />There was also more disconcerting news in housing. A record one in seven US mortgages were in foreclosure or at least one payment was past due in the third quarter, according to fresh data signaling that the housing market&rsquo;s recovery will be tepid at best. <br /><br />The US dollar&rsquo;s gain was another headwind for stocks as it pressured prices of natural resources like crude oil and gold, pushing down shares of companies such as <strong>Alcoa </strong>and<strong> US Steel</strong>. The S&amp;P materials index shed 1.5 per cent as the US dollar index rose 0.2 per cent.<br /><br />The Dow Jones industrial average&nbsp; shed 93.87 points, or 0.90 per cent, to end at 10,332.44. <br /><br />The Standard &amp; Poor&rsquo;s 500 Index slid 14.90 points, or 1.34 per cent, to 1,094.90. The Nasdaq Composite Index dropped 36.32 points, or 1.66 per cent, to 2,156.82.<br /><br /><strong>Bank of America-Merrill Lynch</strong> said notions of a strong rebound for the semiconductor industry next year may not be realistic.