Stock rout erases 2018 gains for Dow, S&P 500

Stock investors bid goodbye to their 2018 gains on Tuesday. The heavy selling on Wall Street continued, with losses in popular tech stocks spreading to the broader market, a rout that erased the 2018 gains of the Dow and broad Standard & Poor’s 500 stock index.

Nervous investors have been dumping shares of U.S. companies for weeks, as worries about the global economy mount due to obstacles ranging from the fallout from the U.S.-China trade dispute to signs of slowing iPhone sales to fears that Federal Reserve interest rate hikes will hurt growth.

The selling pressure was again focused in the hard-hit technology sector, where shares of the so-called FAANG stocks – Facebook, Apple, Amazon, Netflix and Google parent Alphabet – were under pressure. All five stocks, which had been leading the market higher during the bull market, are now down more than 20 percent from their highs in the past year, which puts them in bearmarket territory. The biggest decliners are Facebook, which has been hounded by data privacy issues, down nearly 40 percent from its recent peak, and Netflix, which is off 37 percent.

At the close, the Dow Jones industrial average, which was down almost 600 points at its low, was 552 points lower at 24,466 and trading 1 percent below where it finished in 2017. The S&P 500 finished 1.8 percent lower, pushing it into negative territory for the year. The large-company stock index, considered a proxy for the health of the broader market, briefly dipped 10 percent below its Sept. 20 high, putting it back in so-called “correction territory.” It finished the session 9.9 percent below its peak.

The tech-dominated Nasdaq, which had fallen close to 3 percent earlier and briefly into the red for the year, fell 1.7 percent lower, extending its losses from its late August high to nearly 15 percent. After Tuesday’s plunge, the Dow is 8.8 percent off its recent high.