Dow industrials sink 831 as tech companies plunge
U.S. stocks plunged NEW YORK — to their worst loss in eight months on Wednesday as technology companies continued to drop. The Dow Jones industrial average fell 831 points.
The losses were widespread, and stocks that have been the biggest winners on the market the last few years, including technology companies and retailers, suffered steep declines. Apple and Amazon both had their worst day in 2½ years.
The Nasdaq composite, which has a high concentration of technology companies, had its biggest loss in more than two years.
Alec Young, managing director of global markets research at FTSE Russell, said investors fear that rising interest rates and growing expenses are going to erode company profits next year.
“The tax cuts juiced earnings this year, and that’s not sustainable,” he said. “The market’s starting to say that the glass may be half empty.”
The S&P 500 index sank 94.66 points, or 3.3 percent, to 2,785.68. The benchmark index fell for the fifth straight day, which hadn’t happened since just before the 2016 presidential election.
The Nasdaq composite tumbled 315.97 points, or 4.1 percent, to 7,422.05. It’s fallen 7.5 percent in just five days.
The Dow Jones industrial average gave up 831.83 points, or 3.1 percent, to 25,598.74. The Russell 2000 index of smaller-company stocks shed 46.45 points, or 2.9 percent, to 1,575.41.
Apple gave up 4.6 percent to $216.36, and Microsoft dropped 5.4 percent to $106.16. Amazon skidded 6.2 percent to $1,755.25. Industrial and internet companies also fell hard. Boeing lost 4.7 percent to $367.57, and Alphabet, Google’s parent company, gave up 4.6 percent to $1,092.16.
Insurance companies dropped as Hurricane Michael continued to gather strength and came ashore in Florida bringing winds of up to 155 mph. Berkshire Hathaway dipped 4.7 percent to $213.10, and reinsurer Everest Re slid 5.1 percent to $217.73.
Luxury retailers tumbled after LVMH, the parent of Louis Vuitton, said its sales growth in China slowed. Tiffany plunged 10.2 percent to $110.38, and Ralph Lauren fell 8.4 percent to $116.96.
The biggest driver for the market over the last week has been interest rates, which began spurting higher following several encouraging reports on the economy. Higher rates can slow economic growth, erode corporate profits and make investors less willing to pay high prices for stocks.
The 10-year Treasury yield remained at 3.20 percent, about where it was late Tuesday, after earlier touching 3.24 percent. It was at just 3.05 percent early last week and 2.82 percent in late August.