Wall St Tumbles As Oracle Hits Tech, Banks Drag

The Dow Jones industrial average slid 120.40 points, or 0.97 percent, to end at 12,302.46.

U.S. stocks fell for a second day on Thursday as soft results from technology bellwether Oracle Corp fed worry about a cutback in business spending, while bank shares fell on fears of another major casualty in the sector.

Oracle's weaker-than-expected revenue and cautious comments from its chief financial officer, knocked the software maker's shares down 7.2 percent. That triggered a widespread sell-off of technology shares, including Apple Inc, which slid 3.3 percent.

Rumors that Lehman Brothers Holdings Inc could suffer a fate similar to the near collapse of Bear Stearns pushed Lehman's shares down 8.9 percent. Lehman called the rumors "totally unfounded."

A 3.1 percent slide in Google Inc's shares after Lehman slashed its price target on the Web search leader added to anxieties about tech stocks.

"Oracle came out with results that were a little light and their forward guidance was a little cautious," said James Rosenthal, head trader at Punk Ziegel & Co. in New York.

"Oracle is a very large company. It sells into a lot of different spaces, and if they are a little cautious and companies are waiting to make spending decisions, that will affect all businesses going forward for the next three to six months, and that's why techs are weak today."

The Dow Jones industrial average slid 120.40 points, or 0.97 percent, to end at 12,302.46. The Standard & Poor's 500 Index fell 15.37 points, or 1.15 percent, to finish at 1,325.76. The Nasdaq Composite Index slumped 43.53 points, or 1.87 percent, to close at 2,280.83.

Shares of Boeing Co were the top drag on the Dow, falling 2.7 percent to close at $74.22 on the NYSE after Citigroup cut its price target on the stock to $68 from $78.

Trading was volatile and indexes gyrated widely until the last hour of trading when financial stocks tacked on more losses, causing the market to end right at its sesson lows.

Oracle shares dropped to $19.43 on the Nasdaq, while shares of Apple, the computer and iPod maker, tumbled to $140.25.

Shares of BlackBerry devices maker Research In Motion Ltd slumped 5.1 percent to $112.15 on Nasdaq.

Google shares ended down 3.1 percent at $444.08 after Lehman Brothers cuts its price target by 10 percent on the stock to $580. Chip maker Intel Corp was another high-profile tech casualty, along with technology services company International Business Machines Corp.

Intel shares fell 3.5 percent to close at $21.09 on Nasdaq and IBM shares slid 1.2 percent to finish at $115.52 on the NYSE. IBM ranked second among the Dow's biggest decliners.

Shares of Lehman Brothers, the fourth-largest U.S. investment bank, closed at $38.71, down $3.78 on the NYSE. Earlier, Lehman's stock fell as low as $37.14.

Merrill Lynch shares fell 5.7 percent to $41.90 after Sanford C. Bernstein, a brokerage, said the bank's first-quarter results would likely be the weakest among major U.S. securities firms.

Separately, an influential bank analyst, Meredith Whitney at Oppenheimer & Co, said she expected Merrill to lose $3 a share in the first quarter, and tripled her projected write-down for Merrill to $6 billion from $2 billion.

Among the financial sector's other major decliners were Bank of America Corp, the No. 2 U.S. bank by assets, down 3 percent at $38.64, and JPMorgan Chase & Co, the No. 3 U.S. bank, down 2.8 percent at $42.86.

Before Wall Street's opening bell, the Commerce Department said U.S. corporate profits fell 3.3 percent in the fourth quarter in a report that also confirmed the U.S. economy, measured by gross domestic product, grew at a meager annual pace of 0.6 percent in the same period. GDP is the measure of all goods and services produced within U.S. borders.