Wall Street plunges amid tech stock sell-off

The Daily Telegraph - Business - - Front Page - By James Tit­comb in San Fran­cisco

WALL STREET suf­fered its big­gest fall since Fe­bru­ary last night as a sell­off in tech­nol­ogy giants and in­ter­est rate wor­ries left the bench­mark Dow Jones in­dex nurs­ing a 832 point fall.

The US blue-chip in­dex dropped 3.2pc to end at 25,598.7, while the wider S&P 500 fell 3.3pc to 2,785.68, down for the fifth day straight. In Lon­don the FTSE 100 closed at a six-month low.

Shares in Face­book, Ama­zon, Ap­ple, Net­flix and Google’s par­ent com­pany Al­pha­bet – the so-called “Faang” stocks that have driven US mar­kets to all-time highs re­cently – all fell in New York trad­ing, with the tech-dom­i­nated Nas­daq in­dex record­ing its worst day since 2016, fall­ing 4pc.

Ris­ing gov­ern­ment bond yields have made them more at­trac­tive, lead­ing in­vestors to pull out of eq­ui­ties. US 10-year Trea­suries hit a seven-year high of 3.26pc yes­ter­day. Con­cerns about con­sumer spend­ing have also led to jit­ters as US com­pa­nies pre­pare to un­veil third-quar­ter re­sults.

Net­flix shares fell by 8pc while Ama­zon, Ap­ple, Al­pha­bet and Face­book all dropped by be­tween 4.6pc and 6.5pc. Snap, the par­ent com­pany of the mes­sag­ing app Snapchat, fell 5.9pc and sank to a new all-time low. Com­pound­ing the drop, the US gov­ern­ment an­nounced plans for tougher over­sight of for­eign in­vest­ment in US tech com­pa­nies.

WALL STREET is on its long­est los­ing streak since Don­ald Trump’s elec­tion af­ter rate-rise fears threat­ened to spark a re­run of Fe­bru­ary’s global stocks rout.

The S&P 500 racked up a fifth day in the red af­ter the pro­ducer price in­dex – a key in­fla­tion in­di­ca­tor that tracks whole­sale prices be­fore they reach con­sumers – climbed for the first time in three months.

Signs of build­ing in­fla­tion­ary pres­sures forc­ing the Fed­eral Re­serve to keep up the brisk pace of in­ter­est rate rises well into 2019 re-en­er­gised a global stocks rout that spilt over from the end of last week.

Af­ter Lon­don closed, the sell-off on Wall Street gained pace, with the Dow

Jones end­ing down 3.2pc amid con­cerns over higher bor­row­ing costs and global growth.

The FTSE 100 edged closer to a sec­ond cor­rec­tion of the year. Its first in Fe­bru­ary was also ig­nited by fears of tight­en­ing pol­icy at the US cen­tral bank. Lon­don’s bench­mark in­dex sank 91.85 points to 7,145.74 to hit a fresh six-month low, leav­ing it ap­prox­i­mately 50 points away from cor­rec­tion ter­ri­tory – when an in­dex falls more than 10pc from its 52-week high. As at­ten­tion started to turn to to­day’s cru­cial CPI data in the States, which could give fresh im­pe­tus to the slump, the Dax in Frank­furt dropped 2.2pc while the Euro Stoxx 50, which tracks the top euro­zone stocks, nose­dived 1.7pc.

The lux­ury goods sec­tor led the sell-off in Europe af­ter LVMH con­firmed that Chi­nese cus­toms of­fi­cials are tight­en­ing bor­der checks.

Trench coat maker Burberry suf­fered its big­gest plunge in 10 months af­ter its ri­val con­firmed spec­u­la­tion of a crack­down on tourists bring­ing back unau­tho­rised lux­ury goods from over­seas.

China’s ef­forts to repa­tri­ate con­sumer spend­ing added to fears of slow­ing de­mand in the cru­cial mar­ket for the sec­tor, knock­ing Burberry 152p to £17.28, a 9.1pc fall.

Else­where, Dixons Car­phone bucked the stocks slide af­ter HSBC told clients that the elec­tron­ics re­tailer is on the “road to re­demp­tion” ahead of an ex­pected strat­egy re­boot in De­cem­ber.

An­a­lyst An­drew Porteous ar­gued in an up­grade to “buy” that Dixons must make its trou­bled Car­phone Ware­house model “work or exit”. He also praised man­age­ment’s long-term in­cen­tive plans switch­ing their fo­cus to cash gen­er­a­tion. Dixons ral­lied away from a 10-month low, climb­ing 5.8p to 159.3p.

Pa­per and pack­ag­ing giants Mondi,

DS Smith and Smur­fit Kappa slumped for a sec­ond day af­ter Chi­nese ri­val Nine Dragons out­lined plans to en­ter the US mar­ket. The firm re­vealed that it will in­vest $300m (£227m) in two mills in the States.

Mondi slipped back for a sev­enth straight day, plung­ing 170p to £17.76, while DS Smith and Smur­fit tum­bled 29p to 418.2p and 156p to £25.80, re­spec­tively.

Sage clawed back 9.6p to 556.2p af­ter an­a­lysts at Deutsche Bank warned that the soft­ware gi­ant’s woes could have piqued the in­ter­est of pri­vate eq­uity firms or an ac­tivist in­vestor.

Fi­nally, on the Aim mar­ket, Rus­si­abased oil min­now Urals En­ergy plum­meted 23.5p to 51.5p af­ter be­com­ing aware of an “unau­tho­rised loan” of around $1.5m that has “sig­nif­i­cantly con­strained” its day-to­day fund­ing needs.

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