NEW YORK
Trader Joseph Lawler works on the floor of the New York Stock Exchange March 6, 2015.
Credit: Reuters/Brendan McDermid
Oil prices spiked, with Brent crude up 2.4 percent to $57.86 and U.S. crude up 3 percent to $50.69 after warplanes from Saudi Arabia and its allies struck Shi'ite Muslim rebels fighting to oust Yemen's president. Halliburton shares gained 1.5 percent to $44.12.
"Obviously the situation in Yemen is being used as the excuse for this pullback, which is a continuation of yesterday," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
"Whether or not this is the beginning of a correction that could take us down by eight or ten percent I’m not sure, but certainly the ingredients for one are in the making."
U.S. stocks had dropped on Wednesday as a slump in
technology and biotechs sent the Nasdaq to its biggest decline in nearly a year while the S&P 500 fell through key support levels.
Semiconductor stocks were under pressure for a fourth straight session, after SanDisk (SNDK.O) cut its first-quarter and 2015 revenue outlook and withdrew its other forecasts for the same time frame. Shares of SanDisk tumbled 15.9 percent to $68.27 as the worst performer on the S&P 500.
The PHLX semiconductor index .SOX was down 3.1 percent and is down 9.6 percent for the week.
The Dow Jones industrial average .DJI fell 113.28 points, or 0.64 percent, to 17,605.26, the S&P 500 .SPX lost 11.05 points, or 0.54 percent, to 2,050 and the Nasdaq Composite .IXIC dropped 49.05 points, or 1.01 percent, to 4,827.47.
Initial claims for state unemployment benefits dropped 9,000 to a seasonally adjusted 282,000, the lowest level since mid-February and below the 290,000 estimate, indicating continued strength in the labor market.
At 9:45 a.m., the preliminary or "flash" March reading of financial data firm Markit's Purchasing Managers Index on the services sector is scheduled for release.
Lululemon Athletica (LULU.O) lost 4.4 percent to $58.30 after the Canadian yogawear retailer posted quarterly results and forecast earnings and revenue below analysts' expectations.
Consulting and outsourcing company Accenture Plc's (ACN.N) quarterly net revenue rose 5 percent, helped by growth in its outsourcing business as North American companies look to cut costs. Its shares rose 4.4 percent to $92.05.
Declining issues outnumbered advancing ones on the NYSE by 1,601 to 921, for a 1.74-to-1 ratio; on the Nasdaq, 1,482 issues fell and 618 advanced, for a 2.40-to-1 ratio.
The S&P 500 index posted 2 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 1 new highs and 17 new lows.
(Reporting by Chuck Mikolajczak; Editing by Chizu Nomiyama and Nick Zieminski)
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