Tech companies lead another steep sell-off in U.S. stocks

Another torrent of selling gripped Wall Street Wednesday, sending the Dow Jones Industrial Average plummeting more than 600 points and erasing its gains for the year.

The Nasdaq composite, with a hefty roster of tech stocks, bore the brunt of the sell-off, leaving it more than 10 percent below its August peak, what Wall Street calls a “correction.”

Disappointing quarterly results and outlooks continued to weigh on the market, stoking investors’ jitters over future growth in corporate profits. Bond prices continued to rise, sending yields lower, as traders sought safe-haven investments.

Investors have grown concerned in recent weeks that Corporate America’s tax cut-fueled earnings growth this year will be arrested in coming months amid rising inflation, uncertainty over the escalating trade conflict between the U.S. and China and the likelihood of higher interest rates. Recent data showing the housing market is slowing have also fueled speculation that U.S. economic growth will start to slow next year.

The S&P 500 lost 84.59 points, or 3.1 percent, to 2,656.10. The index is now off about 9.4 percent from its Sept. 20 peak.

The Dow tumbled 608.01 points, or 2.4 percent, to 24,583.42. The Nasdaq slid 329.14 points, or 4.4 percent, to 7,108.40. That’s the Nasdaq’s biggest drop since August 2011, but it’s still up 3 percent for the year.

The Russell 2000 index of smaller-company stocks gave up 57.89 points, or 3.8 percent, to 1,468.70, and is down 4.4 percent for the year.

Bond prices rose, sending the yield on the 10-year Treasury note down to 3.12 percent from 3.16 percent late Tuesday. The slide in bond yields came as traders sought out lower-risk assets.

Technology stocks and media and communications companies accounted for much of the selling. Banks, health care and industrial companies also took heavy losses, outweighing gains by utilities and other high-dividend stocks.

S&P 500 companies are expected to deliver 22 percent earnings growth for the third quarter, with every sector except communications services, which includes Walt Disney, AT&T, Netflix and Google parent Alphabet, expected to show earnings growth, according to S&P Global Market Intelligence.

AT&T was among the big decliners in the media and communications sector, dropping 8.1 percent to $30.36 after the communication giant’s latest quarterly results fell short of Wall Street’s expectations.

The Commerce Department said sales of new U.S. homes plunged 5.5 percent in September, the fourth monthly drop. The report is the latest sign that the housing market is cooling amid rising mortgage rates.

Despite the tumbling stock prices, the U.S. economy looks solid. Helped by tax cuts, the economy expanded at a 4.2 percent annual pace from April through June, fastest in nearly four years. When the Commerce Department report on third-quarter growth comes out Friday, it’s expected to show another solid pickup of 3.3 percent. Unemployment has dropped to a 49-year-low 3.7 percent.

Benchmark U.S. crude edged up 0.6 percent to settle at $66.82 a barrel in New York. Brent crude, used to price international oils, slid 0.4 percent to $76.17 a barrel in London.

Heating oil was little changed at $2.25 a gallon. Wholesale gasoline slipped 0.8 percent to $1.82 a gallon. Natural gas declined 1.4 percent to $3.17 per 1,000 cubic feet.