US stocks fall as technology shares extend last week’s sell-off
S&P 500 Index declined 0.7% to 1,852.59 in New York; Nasdaq 100 fell 0.3%, bringing its three-day drop to 3.8%
New York: The US stocks fell, after the biggest drop for the Nasdaq 100 Index in two years, as technology shares extended last week’s sell-off before the start of corporate earnings.
The Standard & Poor’s 500 Index declined 0.7% to 1,852.59 at 3:30 pm in New York. The index trimmed a decline of as much as 1.3% after falling to within about two points of its average level over the past 50 days. The Nasdaq 100 gauge of the biggest technology stocks fell 0.3%, bringing its three-day drop to 3.8%. The gauge tumbled as much as 1.6% before paring the slide. The Dow Jones Industrial Average slipped 101.88 points, or 0.6%, to 16,310.83. The Russell 2000 Index of small companies sank 1.1% to an almost two-month low. Trading in S&P stocks was 22% above the 30-day average at this time of day.
The S&P 500 rose to a record last week before trimming its weekly gain to 0.4% in the last two days, as the sell-off in technology shares overshadowed optimism on Federal Reserve monetary stimulus.
Biggest Winners
Technology shares were hit as traders dumped the biggest winners of the bull market amid concern valuations have advanced too far. The Nasdaq 100 fell the most in two years on 4 April with declines in all but four stocks. The gauge sank 0.9% for the week after surging 35% in 2013.
The Nasdaq Composite Index, which slid the most in two months on 4 April, dropped 0.7% on Monday. It trades at 31.5 times reported earnings of the companies in the index. That’s almost twice the ratio for the S&P 500, which trades at 17 times earnings.
“It’s just a continuation of momentum," Kevin Caron, a Florham Park, New Jersey-based market strategist at Stifel Nicolaus & Co., which manages about $160 billion, said by phone. “The market, having had a very sharp rally last year, is set to consolidate some of those gains and that’s what we’re seeing here. It’s going to be a tug of war between valuations and the data from here on out." Bloomberg
Sofia Horta e Costa in London and Eric Lam in Toronto also contributed to this story.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!