Stock Market Story: Sept. 28

Stocks finished sharply lower Wednesday, slammed by heavy selling into the closing bell as investor optimism about the progress of debt discussions in Europe faded.

The Dow Jones Industrial Average finished down 180 points, or 1.6%, at 11,011. The blue-chip index dipped as low as 10,997 after running as high as 11,317 earlier. The S&P 500 lost 24 points, or 2.1%, at close at 1151 while the Nasdaq dropped 55 points, or 2.2%, to settle at 2492.Signs of commitment from Europe's leaders to stem the eurozone debt crisis helped stoke a three-day rally in stocks after major U.S. equity indices fell more than 6% overall last week, the biggest decline since October 2008 when the markets were in the first fits of the financial crisis.Specifically, comments from European Commission President Jose Manuel Barroso on Wednesday urging European leaders to do whatever it takes to protect the eurozone propped up hopes for a unified plan from the region.Also, Finland's parliament approved an expansion of the European Financial Stability Facility, a day after Slovenia gave its okay. So far, 10 out of 17 members of the eurozone have agreed to proposed changes to the rescue fund. Germany is scheduled to vote on Thursday.No significant developments came out of Europe Wednesday afternoon, giving investors added opportunity to step back and assess where Europe stands on its debt troubles. "The market has been rocking and rolling, and very sharp rallies have not followed through," says Ralph Fogel, head of investment strategy at Fogel Neale Partners. Fogel considers the market to be on "life support." "It will be a while before it can walk a little bit then run up the stairs," he continued. Once the 20-day moving average crosses the above the 50-day moving average for the S&P 500, then the market will be in better shape, Fogel added.Contributing to uncertainty on Wednesday was another sign of weakness in the U.S. economy. The U.S. Census Bureau said durable goods orders dipped 0.1% in August, missing expectations for an uptick of 0.2%. Orders, excluding transportation, also fell by 0.1%. August's declines compare to growth of 4.1% and 0.7%, respectively, in July. European markets finished lower with the FTSE in London down 1.4%, and the DAX in Frankfurt was off by 0.9%. Overnight, in Asia, the Hong Kong's Hang Seng lost 0.7%, while Japan's Nikkei added 0.07%.Market breadth was tipped to the negative, with about 80% of stocks lost ground and 20% rose. Some 4.3 billion shares traded on the New York Stock Exchange and 1.9 billion traded on the Nasdaq.The basic materials sector put in the weakest performance, with Alcoa(AA) and DuPont(DD) among the Dow's biggest laggards. Bank of America(BAC), losing 4.9%, sunk to the bottom of the Dow.

In corporate news, shares of Amazon.com(AMZN) gained 2.4% to $229.50 on the company's unveiling of its new tablet device, the Kindle Fire. Priced at $199, the Fire, which has a 7-inch screen and is powered by Android, is Amazon's response to Apple's(AAPL) iPad. The company also revealed new versions of its Kindle e-reader, including the Kindle Touch, which will cost $99.

Electronics manufacturing services company Jabil Circuit(JBL) reported better-than-expected fourth-quarter earnings and issued a bullish outlook for its first quarter late Tuesday. The stock gained 8.4% to $18.84.Paychex(PAYX), a human resources and benefits outsourcing company, inched up 0.9% to $26.92 after it topped analysts' estimates by 3 cents a share with first-quarter earnings of 41 cents a share. The Energy Information Administration said crude oil inventories rose by 1.9 million barrels in the week ended Sept. 23. Analysts had expected supplies to remain unchanged, according to a Platts poll of analysts. Late Tuesday, the American Petroleum Institute said crude supplies rose by 568,000 barrels last week.The November crude oil contract shed $3.23 to trade at $84.45 a barrel, and gold for December delivery lost $34.40 to trade at $1,618.10 an ounce. The dollar was gaining against a basket of currencies, with the dollar index up 0.181%. The benchmark 10-year Treasury was declining 8/32, lifting the yield to 1.999%. . >To order reprints of this article, click here: Reprints