*Semiindexdown,justabove50-daymovingaverage
*Indexesdown:Dow0.7pct,S&P0.8pct,Nasdaq1.4pct
*BrentcrudelowerafterhittinghighestsinceSept.'08
*Forup-to-the-minutemarketnewssee[STXNEWS/US] (Updatestoclose)
ByEdwardKrudy
NEWYORK,March7(Reuters)-Technologystockssoldoffon Monday,withtheNasdaqteeteringonakeytechnicalsupport levelasuncertaintyoverhigheroilpriceslookssettodrive volatilityinthedaysahead.
TheNasdaqcompositeindex<.IXIC>dropped1.4percentand closedjustaboveits50-daymovingaverage,awidelyfollowed technicallevelthatifbreachedcouldsignalmoredeclinesin thesectorthathashelpedleadthemarketrally.
WellsFargodowngradedthesemiconductorsector,notingits strongupwardmoves.ThePHLXsemiconductorindex<.SOX>has risen130percentsinceMarch2009.Theindexalsoisup45 percentsincethestartofSeptember,whilethebroadS&P500 hasadvancedabout25percentinthatperiod.Fordetails,see [ID:nL3E7E71AW]
AlsoweighingonNasdaq,communicationsequipmentmaker
CienaCorp
Investors"arejumpingonanopportuneseasonalslowdown thattypicallyhappensbetweenMarchandJulyfortech,"said MarcPado,U.S.marketstrategistatCantorFitzgerald&Co.in SanFrancisco."Ithasbeenoneoftheleadershipgroupssince August."
Brentcrudehasbeenoninvestors'radarasanalystsand
economistsgaugehowitmighthurteconomicdemandifprices
continuetorise.CrudeedgedloweronMondayafterhittingits
highestsinceSept.2008onconflictintheMiddleEast.Brent
crude
TheDowJonesindustrialaverage<.DJI>dropped79.85
points,or0.66percent,to12,090.03.TheStandard&Poor's
500Index<.SPX>fell11.02points,or0.83percent,to
1,310.13.TheNasdaqCompositeIndex<.IXIC>lost39.04points,
or1.40percent,to2,745.63.
Leadinghedgefundmanagersraisedbetsoncommoditiesin thefourthquarter,movingbeyondgoldtosharesofraw materialsproducers.Fordetails,see[ID:nN06220002]
Forotherstories,see[ID:nN06220780]
WellsFargosaiddowngradingthesemiconductorsectorto "marketweight"from"overweight"was"anindicationofa moderatethoughstilloptimisticview."
Eventhoughgainsinsemishaveoutpacedthebroadermarket, theS&P500andthesemiconductorindexhavebeenmovinginthe samedirection,whichcouldmeanfurtherdeclinesinthesector andspellmoreofthesamefortheoverallmarket.
A20-daycorrelationbetweentheS&P500andthe semiconductorindex<.SOX>wasat0.92,withareadingof1 suggestingaperfectcorrelation.
Techhasbeenafavoriteofanalysts,alongwithother cyclicalsectors.
TheCBOEvolatilityindex<.VIX>rose8.2percentto20.63. JoeKinahan,chiefderivativesstrategistatTDAmeritradein Chicagosaidinvestorswereinsuringagainstapossiblefall below1,300fortheS&P500.
"IfwebreakthisleveltheS&Pcouldcontinuealltheway downto1,275.Somanyinvestorsaretryingtogetaheadof thisbypayingupforportfolioprotectionintheformofindex andequityoptions,"hesaid.
Worriesabouttheeffectsofrecenthigheroilpriceson theeconomyhavebeenanegativeforstocks,butanalysts recommendbuyingtheenergysector.
"Industrialsareultimatelyaffectedbyenergyprices,soa sectorthatworksasahedgewouldbetheenergysector,"said BryantEvans,investmentadviserandportfoliomanageratCozad AssetManagementinChampaign,Illinois.
Coppersuffereditsbiggestone-daydeclineinnearlyfour
monthsasrisingoilpricesandgeopoliticalinstabilityfanned
recoverydoubts.Thatweighedonthematerialssector.Freeport
McMoRanCopperandGoldInc
ThebearishviewsovershadowedenthusiasmaboutMonday's dealnews.
WesternDigitalCorp
Also,TomoTherapyInc
Volumewasabout7.92billionsharesontheNasdaq,NYSE andAMEX,belowthedailyaverageof8.47billionforlast year.
OntheNYSEaboutthreestocksroseforeveryonethatfell, whileonNasdaqsevenstocksroseforeverytwothatfell. (AdditionalreportingbyCarolineValetkevitchandDoris Frankel;EditingbyKennethBarry)