TECH TRAIN WRECK
FAANG stocks toothless
Hold on to your stomachs. Wall Street took a wild ride on Thursday as major stock indexes plunged into the red, hit by a sell-off in tech stocks, rising interest rates and worries about weakening global growth as US tensions with Saudi Arabia increased.
The Dow Jones industrial average sank 470 points at its lowest point before paring losses to end the day down 327.23 points — or 1.3 percent — at 25,379.45. The broader S&P 500 fell 1.4 percent.
Formerly high-flying tech stocks were among the worst hit in the session as the Nasdaq declined 2.1 percent.
Theso-called FAANG-group was especially bruised, with Netflix taking the biggest hit, falling 4.9 percent. Amazon was the second-biggest loser, with a 3.3 percent decrease. Facebook, Apple and Google parent Alphabet were down 2.8 percent, 2.3 percent and 2.5 percent.
“The market is focusing on a lot of things” and “is gripped with jitters,” Peter Cardillo, chief market economist at Spartan Capital Securities, told The Post.
Stocks spent much of the morning in negative territory as traders digested Wednesday’s release of the Federal Open Market Committee’s September meeting minutes, which showed that the Federal Reserve was unanimously bent on continued rate hikes.
“The Fed is going to keep raising rates,” Cardillo said. “They made that clear yesterday.”
That could mean more pain as stocks and bonds get used to a normalized rate environment. The VIX, an index of volatility, jumped more than 15 percent on the day to settle again above 20.
“We have these artificially low interest rates supporting risk-taking that needs to normalize,” Jack Ablin of Cresset Wealth Advisors said. “That will put pressure on-stocks and bonds as the reset occurs.”
But for all the recent worries about rates, Ablin said Thursday’s trading was driven more by global-growth concern.
Traders fret that tensions with Saudi Arabia over the disappearance of a Washington Post journalist could result in sanctions and retaliation in the form of higher oil prices. Meanwhile, China’s yuan fell to a nearly two-year low against the dollar.
European squabbles also found their way into US trading as European Central Bank President Mario Draghi appeared to criticize Italy’s planned budget deficit at a summit Thursday, according to reports.