Wall Street tumbles as investors take the knife to tech companies

Wall Street tumbles as investors take the knife to tech companies

The CBOE Volatility Index.VIX, Wall Street's "fear gauge", rose 7 points, or almost 44 percent, to 22.96, going above 20 for the first time since April 11 and hitting its highest close since April 2.

The communications services, .SPLRCL, consumer discretionary.SPLRCD, energy.SPNY and industrial SPLRCI sectors all showed declines of more than 3 percent.

Stocks are extending their slump on Wall Street, led by drops in big technology companies, as rising bond yields draw investors out of stocks.

The Dow Jones Industrial Average - an index of 30 blue-chip stocks - fell 831 points. As LPL Financials' Ryan Detrick notes, the S&P 500 just came off its least volatile third quarter since 1963, has been up for six consecutive months, and hasn't closed up or down more than 1% for more than three straight months, "one of the longest streaks ever". With unemployment at a 48-year-low, that trend is finally starting to change, raising fears that inflation, which has also stayed historically low, could flare up, eroding the value of stocks, salaries, your house, and pretty much everything-and chasing some skittish investors out of the stock market.

Heavyweights Apple shed 1.6 percent and Amazon.com fell 2.5 percent. And those trends, in turn, tend to prompt many investors to sell stocks perceived as more risky-even when the trends are themselves by-products of good economic news and strong market performance.

Stocks are falling sharply on Wall Street as bond yields continue to rise, putting the S&P 500 index on track for its fifth drop in a row.

Apple gave up 4.6 per cent to US$216.36 and Microsoft dropped 5.4 per cent to US$106.16. It was at just 3.05% early last week and 2.82% in late August. Amazon skidded 4.8 percent to $1,781.21.

Oil prices fell more than two percent as US stocks plunged, even though energy traders anxious about shrinking supply from Iran due to US sanctions and kept an eye on Hurricane Michael, which closed almost 40 percent of US Gulf of Mexico output.

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Also, subsidised domestic cooking gas prices have been increased by Rs 2.89 per 14.2 kg cylinder to Rs 502.40, an all-time high. Benchmark Brent crude was up 65 cents at $84.56 a barrel by 0850 GMT, having fallen as low as $82.66 on Monday.

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

The S&P 500 fell 39 points, or 1.4 percent, to 2,840.

Luxury retailers tumbled. Tiffany plunged 9.5 percent to $111.28 and Ralph Lauren fell 7.3 percent to $118.42.

It followed a bleak session in Europe, where Germany's Dax and France's Cac 40 had each ended the day more than 2% lower.

The increase in yields from these bonds - which are parcels of USA government debt - can hurt stocks since they will provide competition for investors' cash. Eastern time. It's on pace to be the index's worst day since February 5, when it lost over 1,100 points in a single trading day.

The Dow Jones Industrial Average lost 117 points, or 0.4 percent, to 26,313.

Declining issues outnumbered advancing ones on the NYSE by a 7.27-to-1 ratio; on Nasdaq, a 7.05-to-1 ratio favored decliners.

Bond prices fell. The yield on the 10-year Treasury rose to 3.23 percent.

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