Tech stocks spark downward slide on Wall Street

Stocks closed lower on Wall Street Monday, as a slide in technology companies offset gains elsewhere in the market.

The S&P 500 fell 0.4% and the tech-heavy Nasdaq composite dropped 1.1%. The Dow Jones Industrial Average held up better, ending down just 0.1%.

The Dow benefited from a 6.3% gain in Disney, which soared after news late Sunday that the entertainment giant had replaced CEO Bob Chapek with his predecessor, Bob Iger.

Tesla tumbled 6.8% for the biggest drop among S&P 500 stocks and briefly slumped to an intraday low of $167.54, the lowest point in two years. The electric car maker’s shares are down more than 50% this year on investor fear that CEO Elon Musk will be distracted by his $44 billion purchase of Twitter.

The market pullback adds to stock indexes’ losses from last week and followed news overnight from China, which announced its first new death from covid-19 in nearly half a year. Strict measures are imposed in Beijing and across the country to ward against new outbreaks. China’s ongoing “zero-covid” lockdown policies have been crimping economic growth in the world’s second-largest economy and stressing businesses.

“Some of the negativity that we’ve seen today is largely due to the idea that demand coming out of China maybe won’t be as strong as people expected,” said Liz Young, head of investment strategy at SoFi.

Casino operator Wynn Resorts, which has a large footprint in China, fell 2.2%. Las Vegas Sands slid 2.9%.

All told, the S&P 500 fell 15.40 points to 3,949.94. The Nasdaq slid 121.55 points to 11,024.51. The Dow slipped 45.41 points to 33,700.28.

Technology stocks were the biggest drag on the benchmark S&P 500. Apple slid 2.2% and Visa fell 2.1%.

Retailers and other companies that rely on consumer spending also weighed down the index, as did energy stocks, which followed a 0.4% dip in the price of U.S. crude oil. Target fell 3% and Exxon Mobil dropped 1.4%.

Household goods makers, banks and other areas of the market kept the losses in check. PepsiCo gained 1.9% and Capital One Financial rose 2.4%.

Smaller company stocks lost ground. The Russell 2000 index fell 10.59 points, or 0.6%, to 1,839.14.

European markets mostly fell, while Asian markets closed lower.

Bond yields fell. The yield on the 10-year Treasury, which influences mortgage rates, slipped to 3.82% from 3.83% late Friday.

Investors face a relatively quiet week. Markets in the U.S. will be closed Thursday for Thanksgiving and will close early Friday.

The Federal Reserve will release minutes Wednesday from its latest policy meeting and potentially give investors more insight into the central bank’s fight against inflation. The Fed remains a main focus for investors as it continues raising interest rates to fight stubbornly high prices on everything from food to clothing.

The Fed has said it could tone down the size of its rate increase, but that it may have to ultimately raise rates to a higher-than-expected level to reach its goal of taming painfully high prices. Its benchmark rate currently stands at 3.75% to 4%, up from close to zero in March.

Wall Street is concerned the Fed could go too far in raising interest rates, which could hit the brakes hard enough on the economy to skid it into a recession. Inflation has been easing somewhat, while key points of the economy, including consumer spending and employment, remain strong.

Investors don’t have much economic news to review this week, but some late earnings and corporate updates could provide more insight into inflation’s path and ongoing impact.

Carvana fell 12.5% after saying it will slash its workforce by 8% as inflation and higher interest rates squeeze the auto market.

Electronics retailer Best Buy and discount retailer Dollar Tree will report their latest financial results today. Farming equipment maker Deere will report its results on Wednesday.