Stocks fall as tech sector stumbles

NEW YORK — Technology stocks went into reverse on Monday, and the losses overshadowed gains in other areas of the market and sent U.S. indexes lower.

Treasury bond prices and gold rose, meanwhile, as investors looked for safer places for their money after the latest escalation in the rhetoric between President Donald Trump and North Korea. And stock markets around the world were mixed after the leader of Europe’s largest economy retained her position, though her political strength may have weakened.

The Standard & Poor’s 500 index dropped 5.56 points, or 0.2 percent, to 2,496.66. The Dow Jones industrial average fell 53.50 points, or 0.2 percent, to 22,296.09, and the Nasdaq composite dropped 56.33, or 0.9 percent, to 6,370.59. Smaller stocks held up better than the rest of the market, and the small-cap Russell 2000 index rose 1.18, or 0.1 percent, to 1,451.96.

The day’s action centered on the technology sector, as tech stocks in the S&P 500 lost 1.4 percent. That’s more than three times the decline of any of the other 10 sectors that make up the index, and the losses were broad: Facebook shares fell 4.5 percent, Nvidia lost 4.5 percent and videogame developer Electronic Arts fell 3.6 percent.

Any stumble for the tech sector this year has been notable given how much better it’s done than the rest of the market. Tech stocks in the S&P 500 have jumped 23 percent in 2017, double the S&P 500’s gain. They’ve been so successful that many hedge funds and other investors have bought them in hopes of riding the tide higher. But tech stocks’ success also means that they’re more expensive than the rest of the market, relative to corporate profits.

“There have been a lot of dollars trafficking in these areas that have been winners the last year or so,” said Nate Thooft, senior portfolio manager at Manulife Asset Management. “As people get scared — as they see better opportunities elsewhere, or as they see someone else heading for the gates — it’s a bit of a self-fulfilling prophecy,” in which investors look to sell their tech stocks before everyone else does.

Benchmark U.S. crude rose $1.56 to settle at $52.22, and Brent crude, the international standard, jumped $2.16 to $59.02 a barrel.

Investors were also keeping a close eye on tensions between North Korea and the U.S. On Monday, North Korea’s foreign minister said Trump’s threat over the weekend that leader Kim Jong Un may not be “around much longer” was a declaration of war.

Prices for Treasury bonds jumped after the comments by Foreign Minister Ri Yong Ho. That in turn pushed down bond yields.

The yield on the 10-year Treasury note fell to 2.21 percent from 2.25 percent late Friday.

The two-year note fell to 1.41 percent from 1.44 percent, and the 30-year dipped to 2.76 percent from 2.78 percent.