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NEW YORK - Wall Street took a tumble Friday as weak economic data and a disappointing earnings report from computer giant Dell weighed on the markets and Hurricane Gustav churned toward the Gulf of Mexico.
Low volume may have intensified the losses with trade thin ahead of a three-day Labor Day holiday in the United States, analysts said.
The Dow Jones Industrial Average slumped 171.22 points (1.46 percent) to end at 11,543.96.
The tech-dominated Nasdaq composite tumbled 44.12 points (1.83 percent) to 2,367.52 and the Standard & Poor's 500 broad-market index retreated 17.85 points (1.37 percent) to 1,282.83.
The main indexes closed lower for the week but held onto gains for a strong August. The Dow rose 1.92 percent, the Nasdaq 2.44 percent and S&P index 1.78 percent in the month.
Ahead of the open, the Commerce Department reported consumer spending rose 0.2 percent in July from June, the weakest gain since February, while personal incomes slid 0.7 percent, the steepest drop since August 2005.
Inflation was running at a 4.5 percent annual pace, the steepest since February 1991.
"Investors turned sour toward the market after both consumer spending and personal spending showed declines in July," said Colleen King at Schaeffer's Investment Research.
"Dell's less-than-stellar earnings report didn't help the situation. If that news wasn't enough, continued concern over (Hurricane) Gustav's eminent distress also weighed on investors' minds."
King said "fears of Gustav turning into another Katrina" kept the markets on edge going into the weekend.
Oil surged in the early trade but gave back the gains. New York's main contract, light sweet crude for delivery in October, fell 13 cents to close at 115.46 dollars per barrel.
Dell reported profits short of most forecasts and warned of "conservatism" in tech spending that appears to be spreading around the world.
Chris Lafakis at Economy.com called the Dell report an "ominous warning," that hurt the broader tech sector.
Dell shares sank 13.8 percent to close at 21.73 dollars following its report.
Elsewhere in the sector, Marvell Technology fell 4.4 percent to 14.11 dollars despite a sharp rise in profits for the semiconductor group. Google shed 2.2 percent to 463.29 dollars and Cisco Systems lost 2.5 percent to 24.05.
Financial shares came under renewed pressure after several days of strong gains.
Fannie Mae slid 13.9 percent to 7.23 dollars and sibling Freddie Mac tumbled 13.8 percent to 4.55 dollars amid ongoing worries about the future of the government-sponsored, shareholder-owned mortgage finance firms.
Also in the financial space, investment bank Lehman Brothers managed a gain of 1.39 percent to 16.09 dollars and Citigroup declined 0.47 percent to 18.99.
Bonds fell, with the yield on the 10-year US Treasury bond rising to 3.813 percent from 3.795 pecent Thursday and that on the 30-year bond increasing to 4.412 percent against 4.389 percent. Bond yields and prices move in opposite directions.
- AFP /ls
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