The Dow tumbles more than 400 points

Wall Street slumps as investors dump tech stocks

Wall Street slumps as investors dump tech stocks

Rising bond yields have been drawing investors out of the stock market, and the stocks that have performed best over the past year took some of the biggest losses Wednesday.

Some of America's biggest tech stocks were caught up in the sell-off, with Netflix (Xetra: 552484 - news) down 8%, Microsoft (Euronext: MSF.NX - news) sliding 5%, Amazon off by 6% and Google's parent company Alphabet (Xetra: ABEA.DE - news) down 5%. Meanwhile, the Nasdaq Composite dropped 315.97 points, or 4.08 percent, and the Dow Jones Industrial Average was down 831 points, or 3.15 percent.

The 10-year Treasury yield rose to 3.22 percent from 3.20 percent late Tuesday after earlier touching 3.24 percent. The S&P 500 dropped 0.6%, and the technology-heavy Nasdaq Composite declined 1%.

The Dow Jones industrial average gave up 738 points, or 2.8 per cent, to 25,686.

It sets up the Australian sharemarket for steep losses to open the session, with futures at 7:35am AEDT pointing to a fall of 109 points, or 1.8 per cent, at the open.

Stocks are opening broadly lower on Wall Street led by drops in technology and industrial companies.

Technology giants have suffered an investor rout that sent U.S. stock markets falling heavily on Wednesday. Amazon skidded 4.8 per cent to $1,781.21 (U.S.). Paint and coatings maker PPG gave a weak third-quarter forecast Monday, while earlier, Pepsi and Conagra's quarterly reports reflected increased expenses. A move of more than two deviations, or 40 basis points now, leads to negative S&P 500 returns, Goldman says.

Roberts described the fall as a slight correction and said he hoped markets would recover similar to what had happened in February and March this year after a dip in the markets also sparked by rising bond yields. Brent crude, the global standard, lost 2.2 per cent to US$83.09 a barrel in London.

This time around, strong economic data anxious bond investors, who sent the benchmark yield on Tuesday to 3.261 percent, the highest since early May 2011.

This trend began with emerging markets, where companies are struggling with rising US interest rates and local currency depreciation - but it is now spreading to USA companies because of challenges to their profits margins.

Wholesale gasoline shed 2.7 per cent to $2.02 a gallon.

As well, analysts expect companies in the S&P 500 will report profit growth of more than 20 per cent, year-over-year, driven partly by tax cuts and strong economic growth.

The S&P 500 fell 54 points, or 1.9 percent, to 2,825.

Japan's Nikkei 225 added 0.2 percent, South Korea's Kospi dropped 1.1 percent and the Hang Seng in Hong Kong gained 0.1 percent.

The yield on the 10-year Treasury rose to 3.23 percent, the highest level in seven years.

Gold rose 0.2 per cent to $1,193.40 an ounce.

The CAC 40 in France dropped 2.1 per cent, Germany's DAX lost 2.2 per cent and the FTSE 100 in London fell 1.3 per cent. The British pound rose to $1.3197 from $1.3146.

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.