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Anniversaries are supposed to be a time of celebration. But on the fifth anniversary of the Dow's all-time closing high, concerns about the state of the global economy after a strong stock market advance over the past four months finally sapped investors' will to bid share price higher. With rioting in Athens in anger over a visit by German chancellor Angela Merkel to Greece, it's clear that Europe's problems are far from over. By the close, the Dow Jones Industrials (INDEX: ^DJI ) had fallen 110 points, with the S&P and Nasdaq putting in even worse losses in percentage terms.
The hardest-hit stocks were in the tech sector. Intel (Nasdaq: INTC ) dropped almost 3%, while Microsoft (Nasdaq: MSFT ) weighed in with a loss of 1.7%. Intel had to deal with an analyst downgrade, but the story looks fairly similar for both companies: a weak PC market has threatened demand for Intel's processors and Microsoft's operating systems and office software suite. The coming release of the Windows 8 operating system will give investors a much better read on how far the PC market has fallen, but in the meantime, shareholders are selling first and asking questions later.
Disney (NYSE: DIS ) also fell more than 1.5%, adding to its declines yesterday that stemmed from a Caris & Company analyst downgrading the stock. But for those concerned about Disney's business model, the downgrade was based almost entirely on valuation. With a big run-up in the shares over the past year, shareholders shouldn't get too greedy.
Finally, Home Depot (NYSE: HD ) gave up 1.5%. Like Disney, Home Depot has retreated from multiyear highs in the past two days. But Home Depot is somewhat more directly exposed to changes in economic conditions, with enthusiasm about a possible rebound in housing still fragile. If macroeconomic and geopolitical issues hit U.S. consumer confidence, then the stock may fall further.
Will the losses continue?
When stocks suffer substantial losses, the obvious question is whether it's just the tip of the iceberg. With Microsoft, investors have waited a long time for Windows 8. Find out whether Microsoft is a buy by reading the Fool's premium report on the software giant. Click here and make a more informed investing decision.