People realize they made some money and maybe should cash that in. Indeed, the technology-dominated Nasdaq had rallied more than 11 percent in the previous six sessions as investors bet on an economic rebound later this year. On Wednesday, the Nasdaq Composite Index sank 70.35 points, or 3.04 percent, to 2,243.50. The Dow Jones industrial average fell 151.73 points, or 1.35 percent, to 11,105.51. The latest leg of the advance came after the Federal Reserve slashed interest rates last week for the fifth time this year by half a percentage point to lift the economy.
Traders are likely to lighten up ahead of the weekend and take profits.
Despite Wednesday's losses, investors are returning to the market. The Philadelphia Stock Exchange semiconductor index dropped 5 percent. Investors also were spooked by a decline in the value of the euro, the single European currency, to its weakest level so far this year after unexpectedly weak growth data from Germany and France. U.S. multinationals, which several months ago were applauding a rebound in the value of the European common currency, are now declining to comment on currency factors as the euro once again sinks. Drug shares slipped after Sen. James Jeffords of Vermont abruptly postponed until Thursday a widely anticipated announcement that he was bolting the Republican party.