Overnight Markets: Wall Street falls on Microsoft downgrade

Wall Street inched lower on Monday as investors took profits on recent gains and Goldman Sachs downgraded Microsoft to “neutral” pushing the technology sector down.

The Dow Jones industrial average declined 78 points, or 0.72%, at 10,751. The Standard & Poor's 500 Index lost nine points, or 0.8%, at 1,137. The Nasdaq Composite Index dropped 26 points, or 1.11%, at 2,344.

The technology sector led the decliners by falling 1.1%. Microsoft dropped 1.9% after Goldman Sachs downgraded the company to “neutral” and reduced its price target for the company citing a slow recovery in PC sales and competition from tablet computers. Intel was lower by 2.3% and Apple dropped 1.4%.

Commodity-related shares were pressured by the rising US dollar. Industrial materials stocks fell, with US Steel Corp off 2.7% and Alcoa down 2.5%.

JPMorgan Chase edged up 0.5% even as the US Justice Department sued American Express on Monday for allegedly violating antitrust law over credit card acceptance rules. American Express shares plunged 6.5%.

In other corporate news, Sara Lee Corp moved up 7.2% after it was reported that the food maker received an unsolicited offer from private equity firm KKR.

Meanwhile, an economic data released on Monday showed that pending sales of previously owned US homes rose more than expected to a four-month high in August. Separately, manufacturing orders in the country fell 0.5% in August, following a revised 0.5% increase in July

In current trading, Asian stocks were trading lower on Tuesday amid speculation Australia’s central bank will increase interest rates and after analysts slashed US investment ratings.

The MSCI Asia Pacific Index dropped 0.4% to 127 as of 11:08 a.m. in Tokyo, marking its first decline in three days. Japan’s Nikkei 225 Stock Average lost 0.3% ahead of a Bank of Japan announcement today on its latest policies. Australia’s S&P/ASX 200 Index fell 0.8% before today’s interest-rate decision from the Reserve Bank of Australia.