Stocks take sharp losses as tech companies drop
NEW YORK — Big technology and internet companies tumbled again Monday, leading to broad losses across the stock market. The Dow Jones Industrial Average briefly fell 500 points.
Apple, Microsoft and Amazon, the most valuable companies on the market, sustained some of the worst losses. Facebook, another longtime investor darling that has fallen out of favor since this summer, also skidded.
After a brutal October, stocks had started to recover early this month. But continued losses for tech companies have sent major indexes lower again.
Mark Hackett, chief of investment research at Nationwide Investment Management, said investors are dumping the high-profile technology companies that have dominated the market recently. He said investors are picking companies based on traditional profit and revenue figures instead of the kind of user growth figures favored by tech companies.
“These things had outperformed the S&P by a mile over the last three years,” he said, but that’s changed now.
The S&P 500 index fell 45.54 points, or 1.7 percent, to 2,690.73. The Dow Jones Industrial Average sank 395.78 points, or 1.6 percent, to 25,017.44. It was down as much as 512 earlier. The Nasdaq composite skidded 219.40 points, or 3 percent, to 7,028.48.
The Russell 2000 index of smaller-company stocks lost 30.99 points, or 2 percent, to 1,496.54.
Investors focused again on trade tensions between the U.S. and China after the two countries clashed at a Pacific Rim summit over the weekend.
A steep loss for Boeing, a major exporter that would stand to suffer greatly in a protracted trade war, weighed heavily on the Dow. Boeing gave up 4.5 percent to $320.94, but is still one of the best-performing stocks in the 30-stock index. Apple fell 4 percent to $185.86 on renewed worries that iPhone sales could slow. Microsoft lost 3.4 percent to $104.62 and Amazon gave back 5.1 percent to close at $1,512.29.
High-dividend stocks like real estate companies and utilities, which investors favor when they are fearful of market turmoil, held up better than the rest of the market.
The disagreements between the U.S. and China at the Asia-Pacific Economic Cooperation meeting left investors feeling pessimistic about the prospects for a deal that would end the trade tensions between the world’s two largest economies. For the first time in almost 30 years, leaders at the summit could not agree on a joint declaration on world trade.
Among tech and internet stocks, chipmaker Nvidia dropped another 21 percent to $144.70. Nvidia said last week that it had a large number of unsold chips because of a big drop in mining of cryptocurrencies. Facebook sank 5.7 percent to $131.55 and Netflix lost 5.6 percent to $270.21.
The S&P 500 index of technology companies has now plunged 13.1 percent since the end of September.