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 (^DJI -0.20%) 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 (INTC 2.31%) dropped almost 3%, while Microsoft (MSFT 0.21%) 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 (DIS -0.19%) 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 (HD -0.24%) 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.