Dow manufacturers lose 831 points as technology stocks dive

NEW YORK – US stocks plummeted on Wednesday as investors stepped up sales of high tech and internet stocks. The Dow Jones Industrial Average fell 831 points, its worst loss in eight months.

Although the losses were widespread, the stocks that were the biggest winners in the market, including technology companies and retailers, suffered sharp declines. Apple and Amazon both had their worst days in two and a half years.

The Nasdaq composite, which has a high concentration of technology companies, suffered its biggest loss in more than two years and has fallen by nearly 8% since early October.

Stocks dropped over the past week, driven by strong economic data and positive comments from Federal Reserve officials, which pushed bond yields higher, as investors hoped the fund's yields would rise. Interest would continue to increase.

Large fluctuations in interest rates tend to destabilize investors, who can also push them to sell stocks and buy bonds. And the trade dispute between the United States and China is still in surplus, which is a significant part of the income of some technology companies.

Alec Young, managing director of global market research at FTSE Russell, said investors were worried that rising interest rates and spending growth would reduce profits generated by the GOP's tax restructuring.

"Tax cuts this year that are not sustainable," he said. "The market is starting to say that the glass can be half empty."

The Dow Jones Industrial Average Index yielded 831.83 points, or 3.1%, to 25,598.74 points. The S & P 500 index fell 94.66 points, or 3.3%, to 2,785.68. The benchmark dropped for the fifth day in a row, which did not happen just before the 2016 presidential election.

The Nasdaq composite, which has a large stock of technology stocks, lost 315.97 points, or 4.1%, to 7,422.05. It fell 7.5 percent in just five days.

The Russell 2000 Small Business Equity Index shed 46.55 points, or 2.9%, at 1,575.41.

The market had experienced a period of relative calm and even large intraday losses had been erased by the end of the day. But over the last five days, the losses remained unchanged and Wednesday the sale continued until closing.

Some of the biggest losers were stocks that recorded double-digit gains earlier in 2018. Apple dropped 4.6% to $ 216.36 and Microsoft fell 5.4% to $ 106.16. Amazon slid 6.2% to $ 1,755.25 and Alphabet, Google's parent company, dropped 4.6% to $ 1,092.16.

Amazon has climbed 50% this year, but dropped 14% from its early September record. The alphabet has dropped 15% since the end of July.

Insurance companies fell as Hurricane Michael continued to strengthen and crashed in Florida with winds of up to 155 km / h. Berkshire Hathaway fell 4.7% to $ 213.10 and reinsurer Everest Re 5.1% to $ 217.73.

Luxury retailers fell after LVMH, Louis Vuitton's parent company, announced that its sales growth in China has slowed. Tiffany dipped 10.2% to $ 110.38 and Ralph Lauren fell 8.4% to $ 116.96.

Although the 10-year US Treasury yield declined at the end of the day, its jump from 3.05% early last week to more than 3.20% – a seven-year high – frightened investors. The yield was only 2.82% last August.

Bond yields and, as a result, interest rates have been rising for more than two years, as the US economy has become stronger. When returns rise for this reason, it's usually good for stocks. But ultimately, high rates worry equity investors because they typically raise borrowing costs and reduce profit margins. They also make bonds more attractive.

Technology and Internet companies are known for their high profit margins. Many have reported explosive growth in recent years, accompanied by a corresponding rise in the price of their shares.

Gina Martin Adams, chief equity strategist at Bloomberg Intelligence, said stocks have become more volatile in recent months, due to investors' concerns about their future profitability.

"Amazon has recently announced a pay increase, Facebook spends a ton on security," she said. "Semiconductors are the most exposed to China among the S & P 500 segments."

Sears lost control after the Wall Street Journal announced that the troubled retailer had hired a consulting firm to prepare a bankruptcy filing in the coming days. The stock fell 16.8% to 49 cents. It was over $ 40 five years ago.

Sears closed hundreds of stores and sold several well-known brands or put them on the market as more and more customers drop out of stores.

US benchmark crude oil fell 2.4% to $ 73.17 a barrel in New York. Brent Brut, the international standard, lost 2.2% to 83.09 dollars a barrel in London.

Wholesale gasoline lost 2.7% to $ 2.02 a gallon. Heating oil fell 1.2% to 2.39 dollars a gallon. Natural gas increased 0.6% to $ 3.28 per 1,000 cubic feet.

Gold rose 0.2% to $ 1,193.40 an ounce. Silver plunged 0.5% to 14.33 dollars an ounce. Copper fell 0.9% to 2.78 USD per pound.

Japan's Nikkei 225 added 0.2%, South Korea's Kospi lost 1.1% and Hong Kong's Hang Seng gained 0.1%.

The CAC 40 in France fell by 2.1%, the DAX in Germany by 2.2% and the FTSE 100 in London by 1.3%.

Emerging market equities have also been hit hard. Investors believe that many of these countries are vulnerable to rising US interest rates, which can reduce investment. The Bovespa of Brazil lost 2.5% and the Merval in Argentina sank by 2.2%.

The dollar fell to 112.59 Japanese yen from 113.05 yen Tuesday night. The euro rose from 1.1469 dollar to 1.1525 dollar. The pound fell from $ 1.3146 to $ 1.3197.