Stocks Fell on Economic Woes. Dow Laggards: HD, BAC, AXP, CSCO, and INTC

Published on Monday, 30 August 2010 18:56 Written by Christopher Lynn

New York, August 30^th (TradersHuddle.com) – Stocks fell in the lowest volume day in the year for the New York Stock Exchange, as merger and acquisitions news and economic data failed to spur a bid. Market participants remained cautious ahead of key economic data later in the week

The market started on the weak side after personal income and consumer spending data, along with fresh M&A news failed to inspire market participants to bid stocks higher. Investors remained cautious ahead of more economic data later in the week, including the important July’s jobs report.

On the M&A front, Genzyme (NASDAQ:GENZ), confirmed the receipt and rejection of an unsolicited bid from French drug giant, Sanofi Aventis (NYSE:SNY) for $69 per share. Also Intel (NASDAQ:INTC), the world’s largest chipmaker, announced plans to acquire the wireless unit Infineon Technologies for $1.4 billion in cash, as the chipmaker attempts to diversify to spur growth. Intel fell 2.23% to $17.96, posting the fifth biggest percentage decline in the Dow Jones Industrial Average.

Over the weekend, also the bidding war for 3Par (NYSE:PAR), the utility storage company, between tech giants Hewlett-Packard (NYSE:HPQ) and Dell (NASDAQ:DELL) turned as 3Par deemed HP's bid of $30 per share superior to the offer of $27 per share that it had already accepted from Dell.

Financials, consumer discretionary, and industrials, were the worst performing sectors in the anemic volume session, as uncertainty from economic data later in the week kept many market participants in the sidelines.

Home Depot (NYSE:HD), the largest home improvement retailer, fell 2.61% to $27.99, making it the worst Dow component, as consumer discretionary stocks fell 1.8% as a group on concern over economic sluggishness in the U.S. will further erode the U.S. consumer.

Financial shares fell 2.2%, posting the biggest decline among the 10 key S&P 500 sectors. Bank of America fell 2.53% to $12.32, posting the second biggest decline in the blue chip index, as financial shares struggled the whole session on economic woes. Bank of America in particular has more exposure to the domestic consumer, sparking speculation that hedge funds are trimming their holdings on the stock as they shift into positions in the financial space that have more international exposure.

American Express (NYSE:AXP), the credit card issuer, was also weaker, dragged down by the financial sector and by concern over consumer spending in an economic slowdown. American Express was the third worst Dow component, as shares lost 2.49% to $39.89.

Cisco (NASDAQ:CSCO), the world’s largest networking gear maker, was the fourth Dow worst component, as shares fell 2.35% to $17.96 on the session. There was speculation that Cisco may have offered to acquire Skype before the company becomes public.

Industrial stocks lost 1.6%, on concern over the economy, with Caterpillar (NYSE:CAT), the world’s largest earthmoving equipment maker, helping lead the sector lower, as shares lost 2.17% to $64.47, rounding up the five worst Dow components.