Dow sinks 831 on tech stock plunge

New York Daily News - - NEWS -

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.

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