Stocks close sharply lower as tech sector takes another hit

Wall Street experienced more whiplash Wednesday as stocks closed broadly lower, wiping out the market’s gains from the day before.

The S&P 500 fell 2.4% after giving up an earlier gain. The selling, which accelerated in the afternoon, was widespread, though technology stocks accounted for the biggest losses. The decline deepens the benchmark index’s September slide to 7.5% after a five-month rally.

The market has shifted momentum several times recently. This week alone, a Monday swoon brought the S&P 500 to the edge of a 10% drop from its record high set on Sept. 2, what Wall Street calls a correction. It rebounded the following day to snap its first four-day slide since stocks were selling off in February. Wednesday’s pullback left the S&P 500 within 0.4% of a correction.

The S&P 500’s bull market began March 23, the low point in the last bear market for stocks. It’s up 44.7% since then.

The S&P 500 fell 78.65 points to 3,236.92. The index is on track for its fourth-straight weekly decline. The Dow Jones Industrial Average lost 525.05 points, or 1.9%, to 26,763.13. The Nasdaq composite slid 330.65 points, or 3%, to 10,632.99. The Russell 2000 index of small company stocks gave up 45.50 points, or 3%, to 1,451.46.

Worries about a potential second wave of COVID-19 cases, doubt that lawmakers in Washington will reach a deal on another economic stimulus bill and uncertainty about the election have contributed to stocks’ losses this month.

But at the center of the market’s big swings have been Apple, Amazon and other Big Tech stocks. They soared through the pandemic on expectations that their growth will only strengthen as the pandemic accelerates work-fromhome and other trends that benefit them. But they began falling early this month amid fears that they had grown too expensive.

The three most valuable companies in the S&P 500 led the selling Wednesday. Amazon slid 4.1%, Microsoft dropped 3.3% and Apple lost 4.2% after earlier flirting with a small gain.

Nike jumped 8.8%, the biggest gainer in the S&P 500, after it reported much stronger profit than analysts expected.

Johnson & Johnson rose 0.2% as it begins a huge final study to try to prove if a single dose COVID19 vaccine can protect against the virus. A handful of other vaccines are already in final-stage studies, and investors increasingly expect one to be available within the first three months of 2021. The hope is that it can help the economy get close to normal again and allow strong growth to resume.

Part of this week’s early stumble for stocks was due to worries about European governments imposing tougher restrictions on businesses to slow the spread of the coronavirus, which hurt travel-related companies in particular. But analysts said the U.K. orders announced Tuesday weren’t as extreme as some investors had feared.

Treasury yields were holding relatively steady, and the 10-year yield fell to 0.67% from 0.68%.

Yields have remained very low as the Federal Reserve has said it expects to keep short-term rates at nearly zero for years. Such support helped Wall Street halt its selloff of nearly 34% earlier this year, along with a big stimulus effort by Congress.