Dow Jones ends at lowest close in 6 years

Bloomberg

Hewlett-Packard, the world’s largest personal-computer maker, fell 7.9 percent and technology firms were the biggest drag on the Standard & Poor’s 500 Index on Thursday. Bank of America and Citigroup fell 14 percent each to lead the Dow’s retreat. Prudential Financial slid 16 percent after losing its ability to borrow under a government program because of a credit-rating downgrade.

The S&P 500 slid 1.2 percent to 778.94, extending its 2009 loss to 14 percent in its worst start to a year. The Dow dropped 89.68 points, or 1.2 percent, to 7,465.95, the lowest since October 2002. The Russell 2000 Index declined 1.5 percent.

"The market is trying to digest the severity of the economic slowdown and its effects on tech stocks and capital spending going forward," said Giri Cherukuri, who helps manage $1.1 billion at Oakbrook Investments. "People are thinking it’s maybe going to be more severe than expected. That’s going to affect spending for the rest of 2009."

The S&P 500 fell for a third day on Thursday as the Federal Reserve cut its forecast for the U.S. economy this year, while government reports showed industrial production shrank more than forecast and housing starts slid to a record low last month. Again on Thursday, a Federal Reserve gauge of manufacturing in the Philadelphia region shrank at the fastest pace in more than 18 years.