Markets hit by economic data, Europe fears and tech weakness

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In a replay of late last week, investors are finding plenty of reasons to sell risky assets today and few reasons to buy.

U.S. stocks are getting hammered by disappointing employment data, fresh worries about Europe’s financial system and renewed selling in popular tech issues, including Apple and Qualcomm.

Although Wall Street often cheers the idea of legislative gridlock in Washington, that prospect -- which President Obama acknowledged in his State of the Union address Wednesday -- hasn’t reenergized the bulls today.

The Dow Jones industrial average was down 101 points, or 1%, to 10,134 at about 10:35 a.m. PST, though it has pulled up from a loss of 180 points earlier. Tech is by far the market’s weakest sector.

The government’s report of a 0.9% rise in non-transportation durable goods orders in December was better than economists expected, but that was offset by a smaller-than-expected drop in new weekly claims for unemployment benefits.

Europe may be the bigger worry at the moment. Stocks were broadly lower there today amid more signs of contagion from Greece’s financial woes. Investors continued to demand sharply higher yields on Greek government bonds, even though the country successfully borrowed more than $11 billion early this week via five-year notes to give itself more breathing room.

The yield on two-year Greek government notes soared to 5.21% today from 5.02% on Wednesday and 4.70% on Monday, while the country’s prime minister again denied rumors that Greece would seek financial help from Germany and France to finance its surging budget deficit.

More troubling to investors was that yields also jumped today on government bonds of Portugal, Ireland and Spain, raising the risk of a spreading crisis.

Jitters about Europe hammered the euro, which fell to its lowest level since July against the dollar, at $1.397 versus $1.404 on Wednesday.

Finally, anyone hoping that Apple’s announcement of its new iPad tablet computer on Wednesday would reenergize the tech sector woke up to find Apple sinking with the rest of tech today. The shares were down $8.68, or 4.2%, to $199.20 at about 10:35 a.m. PST.

Cellphone chip-maker Qualcomm also is taking a big hit, off $6.71, or 14%, to $40.49, after warning late Wednesday that 2010 sales would be below previous expectations.

Of the 10 major industry sectors in the S&P 500, tech is the worst today, down 2.7%. Second-worst is the basic-materials sector, off 1.6%, as the rising dollar is pulling money out of commodities.

Year-to-date the tech sector is down 6.4%, versus a 2.5% loss for the S&P 500 overall.

-- Tom Petruno