The Nasdaq 100 index dropped sharply in midday trading Friday amid new financial sector worries and oil prices bounced back from recent declines.
The index, which includes 100 of the largest nonfinancial securities listed on the Nasdaq Stock Market, shed 40.53 points, or 2 percent, to 1,942.16 in midday trading. Only four stocks were in positive territory.
The broader Nasdaq composite fell 40.73 points to 2,421.34.
Rumors are swirling that Merrill Lynch may issue a profit warning. The company declined to comment.
Additionally, late Thursday Moody's Investors Service cut ratings on MBIA Inc. and Ambac Financial Group Inc., two large bond insurers.
Light, sweet crude for July delivery rose $3.32 to $135.25 a barrel on the New York Mercantile Exchange.
Shares of United Airlines parent UAL Corp. slipped 78 cents, or 9.6 percent, to $7.33. The profitability of airline operators is closely linked to jet-fuel costs. Late Thursday United said it would work with Continental Airlines Inc. in an alliance they hope will boost revenue to offset rising fuel costs.
Shares of SanDisk Corp. dropped $2.08, or 8.9 percent, to $21.35. A Citi Investment Research analyst downgraded the memory chip maker Friday.
Shares of Logitech International SA fell $2.35, or 7.8 percent, to $27.64. A Goldman Sachs analyst downgraded the computer products maker and placed the stock on a Conviction Sell List.
On the gaining side, shares of University of Phoenix operator Apollo Group Inc. rose 89 cents to $52.08. A Credit Suisse analyst upgraded the company Friday.
Shares of Henry Schein Inc., a medical and dental supplies and equipment provider, gained 10 cents to $51.54.
Shares of biotech company Amgen Inc. added 12 cents to $44.98.
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