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[BRIEFING.COM] Stocks opened lower, consolidating a modest portion of yesterday's gains amid renewed profit concerns. However, as fears of more Fed rate hikes mounted and rumors of a possible terrorist threat surfaced, the market deteriorated even further as widespread profit-taking closed virtually every industry to the downside.

Before the market opened, investors were inundated with earnings, weighing mixed reports against a plethora of strong monthly same-store sales figures and paying little attention to the day's only scheduled economic data. Nonetheless, upon further analysis of a preliminary read on Q4 productivity showed a 3.5% rise in unit labor costs, the fastest pace in more than a year, which fueled concern that wage inflation may force the Fed to ward off pricing pressures with additional tightening.

Another report which typically goes unnoticed, especially ahead of the monthly job report, was weekly initial claims. An unexpected decline to 273K, checking in below 300K for a third straight week, confirmed that overall labor conditions remain strong and that Friday's Jan. employment data may show a large gain in payrolls of 225-250K, exacerbating worries that more rate hikes are forthcoming. Combined with speculation surrounding the possible issuance of a specific threat alert, which was quickly quashed by the Dept of Homeland Security, and the bulls found little incentive to buy into diminishing hopes that a widely anticipated March 28 rate hike will be the Fed's last.

With all ten economic sectors closing lower, Technology turned in the worst performance, as losses of more than 1.0% in semiconductor, software, storage and hardware helped erased nearly half of the sector's 3.7% year-to-date gain. Materials, Utilities and Energy, three of the other best performing sectors so far this year, also succumbed to broad-based consolidation. Crude oil futures closing down 2.9% on the day weighed on Energy while a pullback in the year's best performing S&P industry group -- steel -- weighed on Materials. Industrials, yesterday's saving grace, was one of today's most influential sectors to lose ground following downside Q2 guidance from Tyco International (TYC 24.77 -1.33).

Even Consumer Discretionary, despite the retail group's ability to hold onto modest gains following stronger than expected monthly comps from more than 70% of the biggest names posting results, finished in negative territory. A Q4 earnings miss from Comcast (CMCSA 27.02 -0.97) and an analyst downgrade on General Motors (GM 23.52 -0.98) overshadowed huge gains from the likes of Starbucks (SBUX 34.40 +3.04), Gap (GPS 18.56 +0.58) and Federated Dept Stores (FD 69.68 +2.61).
NYSE Adv/Dec 965/2333...Nasdaq Adv/Dec 1008/2038