Market slumps after Microsoft issues warning
NEW YORK — Spooked by an earnings warning from Microsoft, investors Friday dumped high-tech stocks in a sell-off that quickly spread across the market.
The New York Stock Exchange posted its heaviest trading day ever as the Dow Jones industrial average plummeted 2.3 percent.
The Nasdaq composite index dropped nearly 2.8 percent, falling 75.24 to 2,653.27 on Friday — bringing its weekly decline to nearly 9.1 percent or 264.11.
Hotmail upgrades cause problems: Microsoft Corp. said its free e-mail service, Hotmail, has been having problems because of system upgrades. Some customers may have had problems in the past week logging on or being logged out of Hotmail, the company said, adding it’s working hard to restore service to those users.
eToys struggling: Online toy retailer eToys Inc. became the latest dotcom to falter, saying it will cut its work force and may run out of operating cash by the end of March because of weak holiday sales. The company also said in a statement late Friday that it has retained Goldman Sachs & Co. to explore a sale, merger or restructuring.
Friday prices: Gold sold for $270.35, silver sold for $4.59 and platinum sold for $610.70.
Inflation up a bit: Consumer inflation rose modestly in November as a jump in tobacco prices was tempered by a drop in clothing costs. With prices largely well-behaved, economists believe the Federal Reserve next week will shift its focus away from fighting inflation to guarding against a sluggish economy. For the second month in a row, the Consumer Price Index, the government’s most closely watched inflation gauge, rose a seasonally adjusted 0.2 percent, the Labor Department reported Friday.