U.S. Markets Sell Off Late, End Sharply Lower

July 9, 2008 5:35 p.m. EST

New York, NY (AHN) - All three major indices finished on their session lows Wednesday as heavy selling pressure in financial and tech categories took markets lower in afternoon trading.

"This is a market that is pretty eventless today, oil is not moving much, and that's the focus," said Hugh Johnson, chairman of Johnson Illington Advisors, according to MarketWatch. "Then most of the attention is going to be on earnings, and the earnings of financials, we'll get those as well as earnings from technology next week, more so than this week."

The Dow Jones Industrial gave up 237 points or 2.1 percent as 25 of the 30 Dow components were lower on the session.

The S&P 500 shed 29 points or 2.3 percent as the financials were the main economic sector to drag the index down.

The financial sector showed no follow through on Tuesday's 5.7 percent gain, giving back most of the gain with a 5.2 percent decline on Wednesday. Selling was felt throughout the sector but was most prevalent in mortgage stocks with Fannie Mae (FNM) and Freddie Mac (FRE) shedding 13 percent and 23 percent, respectively.

The tech sector showed weakness as Cisco Systems (CSCO) shed more than 5 percent after UBS cut their price target on the stock from $27 to $25.50, saying Cisco faces challenges due to slowing sales in the U.S. and Europe.

The Nasdaq Composite moved lower 59.5 points or 2.6 percent, closing at 2,234.89.

Utilities stocks were the leader, gaining nearly 1 percent on the session.

In commodity news, crude oil generally traded flat on the session, lower just 0.4 percent to close at $135.50. The weekly inventories report, which showed larger than expected declines, failed to rally the commodity as it remains down on the week. Without a rally in crude, the energy sector sold off 2.1 percent.