MARKETS NOSEDIVE

Tech stocks lead plummet as Nasdaq loses 5%

NEW YORK — Wall Street’s euphoria took a break Thursday, as steep losses in technology stocks dragged the rest of the market down with them.

It was the biggest decline for the U.S. stock market since early June, when investors were dealing with a surge of coronavirus infections in Florida, Texas and Arizona.

The market felt due for a breather, investors said. Both the S&P 500 and Nasdaq hit record highs just the day before and the S&P 500 had risen nine out of the previous 10 days.

Big Tech stocks like Apple, Amazon and Facebook have made massive gains this year. Investors have been betting those companies would continue posting huge profits as people spend even more time online with their devices. Market watchers have been questioning recently whether those gains were overdone. Apple is still up 64.7% for the year, and Amazon is up 82.3%.

“There’s really very little to justify (these big stocks’ upward move) other than euphoria,” said Mark Hackett, of investment research at Nationwide.

The number of Americans who applied for unemployment benefits fell last week to 881,000, slightly better than expected. But companies are still letting workers go at numbers well above those seen in the Great Recession, meaning the jobs picture remains bleak.

The Dow Jones fell 807.77 points, or 2.8%, to 28,292.73. The S&P 500 index lost 125.78 points, or 3.5%, to close at 3,455.06. The technology-heavy Nasdaq dropped 598.34 points, or 5%, to 11,458.10.