Tech stocks lead Wall Street slump as investors shun risk

AP  File		The interior of the New York Stock Exchange

AP File The interior of the New York Stock Exchange

Some market watchers had predicted a bounce on Thursday after Wednesday's pullback, Wall Street's worst day since February.

The S&P 500 index sank 73 points, or 2.5 per cent, to 2,807 as of 3:30 p.m.

After U.S. tech shares plummeted overnight, Chinese Internet giant Tencent, Asia's largest company by market capitalization and a major factor in the Hong Kong Hang Seng Index, was battered again as it fell 6.8 percent.

Higher bond rates can weigh on stocks as they provide more competition for yield-hungry investors. Those higher rates have been the catalyst for recent selling, stoking concerns that slower growth would impinge on corporate profits.

West Texas Intermediate has shed almost $4 a barrel since Tuesday, marking its steepest two-day decline in more than three years.

The drop led a wider drop in USA markets. "They're so tight. I think the Fed has gone insane", he told reporters while traveling in Pennsylvania on Wednesday.

Stephen Innes of OANDA said that Trump's comments have put pressure on the dollar but "the severity of this equity rout could bring the hawkish Fed narrative into question".

"The market is not necessarily going to take out much from the yield path", Goncalves said. Early Thursday, National Economic Council Director Larry Kudlow in a news conferfence heralded the administration's economic policies and assured the public that "the war on business is over".

Global interest rates are near all-time lows, while the United States is pushing interest rates higher given recent economic strength, among other things. Amazon dropped another 2% to $1,719.36 and Apple fell 0.9% to $214.45. Wholesale gasoline, heating oil and natural gas also declined.

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Stocks from emerging markets were also hard hit.

Wall Street stocks plunged Wednesday, with major indices losing more than three percent in a selloff prompted by the sudden jump in USA interest rates.

The Dow Jones Industrial Average fell 545.91 points, or 2.13 percent, to 25,052.83, the S&P 500 lost 57.31 points, or 2.06 percent, to 2,728.37 and the Nasdaq Composite dropped 92.99 points, or 1.25 percent, to 7,329.06.

MSCI's gauge of stock performance in 47 countries fell 2.2 percent, the pan-European FTSEurofirst 300 index of leading regional share lost 2.1 percent. The Nasdaq composite dropped 173, or 2.2 percent, to 7,565.

The Russell 2000 index of smaller-company stocks shed 46.45 points, or 2.9 percent, to 1,575.41.

Back in late January and early February, there was a 10 percent correction in the S&P 500 .SPX, with stock investors spooked as Treasury yield increases intensified with a monthly payrolls report showing the biggest wage gains for workers since 2009. The yield on the benchmark 10-year note dropped to 3.13 percent.

Markets in Europe came off their earlier losses after the inflation report. "The valuation of US stocks, especially tech stocks, is still pretty high and there could be some profit taking actions now", Tan explained.

The dollar fell to 111.98 yen from 112.59 yen, and the euro rose to $1.1593 from $1.1525.

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