Stocks declined Friday after weak results from Dell and a jump in oil prices.
The Nasdaq tumbled nearly 2 percent, dragged down by the Dell news. The Dow Jones Industrial Average and S&P 500 were off about 1 percent. All 30 Dow components were lower.
All three major indexes appeared on track to finish lower this week as oil surged and worries about the financials escalated, but up about 2 percent for the month of August.
The bond market closed at 2pm ET today ahead of the Labor Day holiday. All U.S. financial markets will be closed on Monday.
If you take a step back and look at the Dow chart for the summer, it's a wide V: Stocks skidded for the first half of the summer, touched down in mid-July and then began to recover on a shallow incline.
Some market watchers are looking to see if we retest those mid-July lows but Vince Farrell, chief investment officer at Soleil Securities Group said the bear bottom might be behind us. "The further away and the higher we get from the lows of July make the likelihood of revisiting those levels less likely," Farrell wrote in a guest blog post on CNBC.com.
Light, sweet crudesettled at $115.46 a barrel , just a few cents shy of Thursday's close as a stronger dollar balanced worries about Tropical Storm Gustav's impending arrival in the Gulf Coast.
Oil is up about $1 from where it ended last Friday as it has become increasingly clear this week that Gustav could slam oil refineries in the gulf. Still, it's down about $10 for the month of August as the dollar has strengthened.
Trading has been extremely light during this last week of summer — about half the daily average — as a lot people crammed in vacations or took time off to get the kids ready for school. Gustav's appproach and continued uncertainty in the financial sector certainly didn't offer any incentive for those traders who were in the office to amp up their activity.
Dell put pressure on the tech sector Friday after releasing disappointing quarterly numbers after the bell Thursday. Analysts said Dell just cut prices too much in an attempt to grab -- or buy -- more market share. Dell's comment that spending cutbacks on information technology have spread from the U.S. to Western Europe and Asia rippled through the sector.
Chip makers also were also under pressure after chip maker Marvell Technology beat earnings expectations but delivered a tepid outlook for the third quarter. Marvell chips are used in Apple's iPhone and Research In Motion's BlackBerry devices.
Shares of Novell bucked the tech trend after the business software maker topped forecasts, boosted by a jump in sales of Linux software, and raised its outlook for 2008. Novell is the world's second-largest seller of Linux software after Red Hat .
The market was all abuzz about Lehman Brothers , with analysts noting that a long, three-day weekend would be a perfect time for a buyer to sweep in and take over Lehman.
Shares of Fannie Mae and Freddie Mac took a breather after a dizzying ascent in the past week that saw Fannie up 80 percent at Thursday's close from its intraday low of $4.40 last Friday and Freddie Mac double in that time period from its low of $2.50 that day.
General Motors shares slipped after the auto maker recalled nearly 900,000 vehicles equipped with a heated windshield-wiper-fluid system that was prone to short circuiting.
In economic news, consumer sentiment hit a five-month high, the University of Michigan reported. Personal income fell 0.7 percent, according to the Commerce Department reported, as spending ticked up 0.2 percent. The Institute for Supply Management's Chicago business barometer jumped to 57.9 in August from 50.8 in July.
Looking ahead to next week, financial markets are closed on Monday. The Republican National Convention begins on Tuesday. Not much in the way of earnings except for a few homebuilders. Next week brings some big economic numbers, including the ISM manufacutring report on Tuesday, the Fed's beige book report on Wednesday, the ISM services report on Thursday and the August jobs report on Friday.
The jobs report will be most closely watched of next week's data points. Economists expect to see nonfarm payrolls drop by 75,000 jobs and for the unemployment rate to come in at 5.7 percent.
NEXT WEEK:
MONDAY-THURSDAY: Republican National Convention
MONDAY: Fed's Hoenig speaks
TUESDAY: ISM manufacturing; construction spending
WEDNESDAY: Weekly mortgage applications; ADP employment report; factory orders; crude inventories; Fed's beige book; Earnings from Staples, H&R Block and Hovnanian
THURSDAY: Monster employment report; jobless claims; productivity; ISM services index; Fed's Yellen speaks; Earnings from Toll Brothers
FRIDAY: August jobs report; earnings from Nat Semi
Send comments to cindy.perman@nbcuni.com.