US stocks tumble on lower spending, Dell's earnings

Business Materials 30 August 2008 04:27 (UTC +04:00)

US stocks retreated Friday, led by slower consumer spending and lower-than-expected earnings from computer maker Dell. ( dpa )

As incomes dropped an unexpected 0.7 per cent in July, the US Commerce Department said growth in personal spending slowed to 0.2 per cent.

Dell, the second-biggest personal-computer maker, posted its biggest drop in earnings since 2000, and attributed it to "continued conservatism" among US consumers, which was also spreading to parts of Western Europe and Asia.

Technology stocks tumbled, with Apple losing 2.4 per cent, Microsoft dropping 2.3 per cent and the largest chip-maker Intel dipping 3.1 per cent.

"The environment remains challenged for the equity market," Mike Ryan of UBS Financial Services Inc, told Bloomberg financial news. "As we're faced with the impact of higher energy costs and the lack of availability of credit, that's going to put more pressure on the consumer sector."

The blue-chip Dow Jones Industrial Average fell 171.63 points, or 1.47 per cent, to 11,543.55. The broad-based Standard & Poor's 500 Index dipped 17.85 points, or 1.37 per cent, to 1,282.83. The technology-heavy Nasdaq Composite Index dropped 44.12 points, or 1.83 per cent, to 2,367.52.

The US currency rose to 68.15 euro cents from 68.05 euro cents on Thursday. The dollar fell against the Japanese currency to 108.80 yen from 109.49 yen on Thursday.

Gold fell to 835.20 dollars on Friday from 837.20 dollars per fine ounce on Thursday.