A roller coaster steered by tech
A late-afternoon sell-off wiped out gains for stocks on Wall Street on Thursday and sent major indexes deeper into losing territory for the year.
The sharp about-face for the broader market was once again directed by technology stocks, which have been behind choppy trading throughout the week.
As investors prepare for higher interest rates, shares in pricey tech companies and other expensive growth stocks look relatively less attractive.
The Standard & Poor’s 500 fell 50.03 points, or 1.1%, to 4,482.73, with nearly 85% of stocks in the index falling. The benchmark index closed at a three-month low after having been up as much as 1.5% earlier in the day.
The Dow Jones industrial average fell 313.26 points, or 0.9% to 34,715.39.
The Nasdaq fell 186.23 points, or 1.3%, to 14,154.02. The index’s losses in recent months had by Wednesday left it in what Wall Street considers a market correction, or 10% below its peak.
Apple fell 1% and chipmaker Nvidia shed 3.7%.
A mix of retail and communications stocks also fell. Investors reversed course from earlier in the trading day and shifted money back toward safe-play investments.
Utilities, which are considered less risky, were the only sector within the S&P 500 that eked out gains.
Bond yields fell. The yield on the 10-year Treasury fell to 1.81% from 1.82%.
Stocks are headed for weekly losses in what has so far been a losing month for every major index.
The downturn follows a strong 2021, during which the S&P 500 gained 26.9%. Investors may be resetting their expectations moving ahead, said Mark Hackett, chief of investment research at Nationwide.
Companies are reminding investors that supply chain problems are still weighing on operations. Recent inflation reports have been worrisome, while economic data on retail sales have also disappointed.
The latest round of corporate earnings is also giving investors a clearer picture of where Americans are spending money and how inf lation is affecting the economy.
American Airlines fell 3.2% and United Airlines slipped 3.4% after warning investors that the latest surge in COVID-19 cases will hurt their finances early in 2022.
Both airlines reported losses for the fourth quarter, though they were smaller than analysts expected.
Aluminum products maker Alcoa jumped 2.7% after reporting strong fourthquarter financial results as prices for commodities rose. Insurer Travelers rose 3.2% after handily beating analysts’ financial forecasts.
Peloton shares lost about a quarter of their value after CNBC reported the company is temporarily halting production of its treadmills and exercise bikes.
Peloton shares soared as people exercised at home in the first year of the pandemic, but they have fallen 85% since closing at an alltime high of $167.42 on Jan. 13, 2021. On Thursday, the shares slid 23.9% to $24.22.