Tech stocks take a beating, as plunge in market erases gains for 2018
All the stock market gains of 2018 disappeared Tuesday in a flurry of sell orders on Wall Street, where investors soured on tech stocks and fretted about trade war with China.
The selloff began with tech stocks including Apple, Amazon and Alphabet, the parent company of Google, but quickly spread to other sectors such as energy, retail and telecommunications.
The Dow Jones Industrial Average closed at 24,465, down 551 points, or 2.2 percent. The SP 500 fell 48 points, or 1.8 percent, and the tech-heavy Nasdaq shed 119 points, or 1.7 percent.
Analysts began warning about the potential for a recession next year.
White House chief economist Larry Kudlow tried to squelch that talk.
“I’m reading some of the weirdest stuff, how a recession is around the corner nonsense,” he told reporters at the White House. “My personal view, our administration’s view, recession is so far in the distance I can’t see it.”
Investors fretted about overvalued tech stocks, rising interest rates, a slowdown in global growth and an ongoing trade fight between the U.S. and China.
Katie Nixon, the chief investment officer for Northern Trust Wealth Management, said investors are selling tech stocks because of signs that trade tensions between the U.S. and China are getting worse instead of improving.
“A resolution doesn’t seem to be coming in the short term,” she said. “A lot of the companies that are front and center Alphabet, Apple, IBM could be significantly limited in the way they export their technology.”
Presidents Trump and Chinese President Xi Jinping are set to meet next week at the G20 summit in Argentina, but a breakthrough in the trade standoff is not expected.
The frenzied selling followed big losses Monday, when the Dow shed nearly 400 points. It was the worst start of a Thanksgiving week since 2011 for the Dow and the SP 500 and since 2000 for the Nasdaq, according to Dow Jones Market Data.
The turmoil on Wall Street followed downturns around the world.
In Europe, Germany’s DAX index lost 1.6 percent and France’s CAC 40 shed 1.2 percent. London’s FTSE 100 retreated 0.8 percent.
Tokyo’s Nikkei 225 lost 1.1 percent and Hong Kong’s Hang Seng shed 2 percent while Seoul’s Kospi retreated 0.9 percent.
Tech stocks also were among the biggest losers in Europe. Nokia, a big supplier of telecom networks, saw its shares drop 4 percent, while its Swedish rival Ericsson was down 3.5 percent. SAP, which provides business software and cloud computing services, was down over 2 percent.
This story is based in part on wire service reports.