Stronger Dollar, Weak Economic Data Pummel Stocks

SARA LEPRO

Major indexes tumbled more than 1 percent Thursday, including the Dow Jones industrials, which fell about 133 points by midday.

Energy and material stocks showed the biggest losses as a jump in the dollar sent commodity prices tumbling. Meanwhile, an analyst's downgrade of the chip sector pulled technology shares sharply lower.

Analysts said the dollar was the biggest force behind Thursday's trading, as it has been in recent months. A stronger dollar makes commodities more expensive to foreign buyers, and companies that produce the commodities make less money from them.

"There might be a little fear out there about dollar strengthening, as well as some natural profit-taking opportunities," said Dan Cook, senior market analyst at IG Markets Inc. in Chicago. "We've been on an amazing run."

The stronger dollar also makes U.S. goods and services more expensive, and theoretically harder to sell, overseas. And U.S. companies that do business abroad make less money when their earnings are translated from other countries' currencies into dollars.

The latest data on the economy gave investors little incentive to hold on to stocks.

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