Wall St reverses early gains as tech drags

NEW YORK: US stocks slipped on Wednesday, reversing gains of more than 1 percent, as weak results from Dell dragged down the largest US personal computer makers and offset recent upbeat earnings and outlooks from retailers, including Target Corp .

Dell fell 9.3 percent to $14.33 and was the top percentage loser on the Nasdaq, a day after its quarterly revenues came in below estimates and it forecast flat current-quarter sales late Tuesday.

Shares of Hewlett-Packard, down 4.5 percent at $31.14, weighed on the Dow.

Stocks started the day with solid gains, but turned lower by midday, with decliners beating advancers on the Nasdaq by about 7 to 5.

"I think you're going through a bottoming process, and it's going to take a period of weeks," said Jeffrey Saut, Raymond James Financial's chief investment strategist in St. Petersburg, Florida.

Stocks saw sharp downward swings last week after Standard & Poor's downgrade of the United States' top-tier credit rating on Aug. 5. The benchmark S&P 500 index is down 12.8 percent from its April 29 high.

Concerns that the US economy may be headed for another recession and that Europe may be unable to stem its financial troubles have hit the market, Saut said, but he said he doubts another US recession is likely at this point.

The Dow Jones industrial average was down 39.96 points, or 0.35 percent, at 11,365.97. The Standard & Poor's 500 Index was down 3.07 points, or 0.26 percent, at 1,189.69. The Nasdaq Composite Index was down 21.72 points, or 0.86 percent, at 2,501.73.

German Chancellor Angela Merkel and French President Nicolas Sarkozy disappointed investors on Tuesday when they failed to offer plans to boost the size of a euro zone rescue fund or begin sales of euro bonds.

Among gainers, Target jumped 2.4 percent to $50.54 after it posted strong results, adding to upbeat results from Wal-Mart Stores Inc and Home Depot Inc on Tuesday.

Copyright Reuters, 2011