Dow sinks 831 on tech stock plunge
Stocks plunged Wednesday as investors, fearful that rising interest rates and trade tensions could hurt profits, ramped up selling of high-flying technology and internet stocks. The Dow Jones Industrial Average fell 831 points, its worst loss in eight months.
The losses were widespread, and stocks that have been the market's biggest winners suffered steep drops. Apple and Amazon, the two most valuable companies in the S&P 500, each had their worst day in two-and-a-half years.
The Nasdaq composite, which has a high concentration of technology firms, suffered its biggest loss in more than two years; it's dropped nearly 8% since Oct. 1.
Wednesday's drop should be placed in perspective. Since early 2009, the S&P 500 has quadrupled, driven higher by the U.S. economic expansion, hefty corporate profits and historically low interest rates.
Stocks have slumped over the last week largely due to worries over rising interest rates. The Federal Reserve recently raised short-term interest rates for the third time this year. Strong economic data and a positive outlook from Fed officials last week sent bond yields sharply higher and sparked concerns about even higher interest rates.
Big moves in interest rates tend to unsettle investors, and they can also push them to sell stocks and buy bonds instead. And there is still an overhang from the U.S. trade dispute with China, which accounts for sizable portions of some tech companies' revenue.
The Dow Jones Industrial Average gave up 831.83 points, or 3.1%, to 25,598.74. The S&P 500 index sank 94.66 points, or 3.3%, to 2,785.68. The benchmark index fell for the fifth straight day, which hadn't happened since just before the 2016 presidential election.
The Nasdaq composite, with a large contingent of tech stocks, tumbled 315.97 points, or 4.1 percent, to 7,422.05. It's fallen 7.5 percent in just five days.
The Russell 2000 index of smaller-company stocks shed 46.45 points, or 2.9%, to 1,575.41.