Tech sell-off puts markets in a tailspin

A broad sell-off in technology companies pulled U.S. stocks sharply lower yesterday, knocking more than 600 points off the Dow Jones Industrial Average.

The wave of selling snared big names, including Apple, Amazon and Goldman Sachs. Banks, consumer-focused companies, and media and communications stocks all took heavy losses. Crude oil prices fell, erasing early gains and extending a losing streak to 11 days.

The tech stock tumble followed an analyst report that suggested Apple significantly cut back orders from one of its suppliers. That, in turn, weighed on chipmakers.

“With the news out of the Apple supplier this morning, you have the market overall questioning the growth trajectory as we look out to 2019,” said Lindsey Bell, investment strategist at CFRA. “We continue to like tech going into next year, but we think it could be a little bit of a rocky period for the group as we continue through the last two months of the year.”

The S&P 500 index dropped 54.79 points, or 2 percent, to 2,726.22. The Dow fell 602.12 points, or 2.3 percent, to 25,387.18.

Apple tumbled 5 percent to $194.17 after Wells Fargo analysts said the iPhone maker is the unnamed customer that optical communications company Lumentum Holdings said was significantly reducing orders. Shares in Lumentum plunged 33 percent to $37.50.

“The bull market is not over, the economic expansion is not over, but things are starting to wind down,” said Randy Frederick, vice president of trading & derivatives at Charles Schwab. “We’re clearly getting into the late innings of the ball game.”