By Nick Godt, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks closed lower Thursday after an earnings forecast from technology icon Apple Inc. disappointed investors, weighing heavily on shares throughout the tech sector.
"Tech is the whole story today," said Art Hogan, market strategist at Jefferies & Co, commenting on accelerating losses in the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP -0.05% in afternoon trade.
The tech-heavy index closed down 36.21 points, or almost 1.5%, at 2,443.21, while Apple's /zigman2/quotes/202934861/composite AAPL +0.29% stock slumped 6.3%.
"Our concern is focused on what earnings growth looks like for 2007 and, so far, it doesn't appear to be a pretty picture," Hogan said.
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.20% finished down 9.22 points at 12,567.93 and the S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.18% closed off 4.25 points at 1,426.37.
Weakness was seen in the Dow's tech components: Intel Corp. /zigman2/quotes/203649727/composite INTC +0.69% , IBM /zigman2/quotes/203856914/composite IBM +1.19% and Hewlett-Packard Co. /zigman2/quotes/203461582/composite HPQ +1.97% .
Among the few gainers were telecom stocks Verizon Communications /zigman2/quotes/204980236/composite VZ +1.29% and AT&T Inc. /zigman2/quotes/203165245/composite T +0.78% and drug giants Merck & Co. Inc. /zigman2/quotes/209956077/composite MRK +0.36% , Pfizer Inc. /zigman2/quotes/202877789/composite PFE +3.53% and Johnson & Johnson /zigman2/quotes/201724570/composite JNJ +0.47% .
Energy shares, such as Exxon Mobil Corp. /zigman2/quotes/204455864/composite XOM +3.74% , weighed on the broad market as crude oil reversed early gains to fall sharply.
The price of a barrel of oil plunged $1.76, or 3.4%, to close at $50.48 after bearish weekly U.S. inventories data. Also, the International Energy Agency cut its forecasts of oil demand, citing a mild winter and a slowing U.S. economy. See Futures Movers.
Financial shares provided mild support after Merrill Lynch reported earnings flew past expectations. See full story.
But even the brokerage giant's stock gave up early gains and closed down 1.5% at $95.40.
Most of the heavy selling that hit the technology sector was related to Apple's results, which were released late Wednesday.
Although profit soared past expectations, Apple's forecast for the current quarter fell shy of analyst estimates. See full story. J.P. Morgan also cut its rating on Apple's stock to neutral from overweight.