Dow Plunges Over 800 Points as Investors Flee Tech
*By Kavitha Shastry*
U.S. stocks accelerated their losses Wednesday, with the Dow tumbling more than 800 points for its biggest point drop since February.
Shares of Amazon ($AMZN) and Microsoft ($MSFT) were down more than 4 percent late in the trading day, while Jack Dorsey's Twitter ($TWTR) and Square ($SQ) were both down more than 7 percent.
"Valuation is just coming to a bit more realistic levels in the tech sector," said John Petrides, Managing Director at Point View Wealth Management. "How many times have we spoken about tech being the driving sector for the market returns.
"Twenty-six percent of the S&P 500, the FAANG stocks equalling 45 percent of the Nasdaq ー you're having profit-taking there."
The sell-off adds to October's market losses ー the S&P 500 is now down five days in a row, its longest losing streak since before the 2016 election ー with investors worried about the impact of ongoing trade tensions and borrowing costs at seven-year highs.
While tech stocks were among Wednesday's biggest losers, high-end retailers also took a hit. France's LVMH warned it was seeing slower demand from Chinese consumers, an indication that tariffs from the U.S. were eating into discretionary budgets. Shares of Tiffany ($TIF), Michael Kors ($KORS), and Ralph Lauren ($RL) were all down.
The Nasdaq led losses among the broad market indexes, falling more than 3 percent. For the month, it's already down nearly 8 percent, its biggest monthly decline since January 2016.
Tesla reported a surprise increase in sales in the third quarter as the electric car maker likely benefited from a rush by consumers to take advantage of a $7,500 credit before it expired on Sept. 30. The company reported Thursday that sales in the three months through September rose 7% compared to the same period a year ago. The gain follows two quarters of steep declines as people turned off by CEO Elon Musk’s foray into right-wing politics avoided buying his company’s cars and even protested at some dealerships. Sales rose to 497,099 vehicles, compared with 462,890 in the same period last year.
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