By Shreyashi Sanyal
(Reuters) -Wall Street’s main indexes tumbled on Monday as investors shifted out of technology stocks in the face of rising Treasury yields, while fresh U.S.-China concerns over trade offered another reason for caution.
U.S. Treasury yields have been supported by recent data showing increased consumer spending, accelerated factory activity and elevated inflation growth, fuelling bets that the Federal Reserve could start tightening its accommodative monetary policy sooner than expected. [US/]
High-flying companies including Apple Inc, Facebook Inc, Microsoft Corp, Alphabet Inc and Amazon.com Inc fell between 2.4% and 5.8%.
Facebook was also pressured after its app and its photo-sharing platform Instagram were down for thousands of users, according to outage tracking website Downdetector.com.
The S&P 500 technology and communication services sectors tumbled about 2.5% each, leading declines among the 11 major S&P 500 sector indexes.
“The pressure that the technology space continues to feel is because of rising interest rates. Right now people are voting with the sell tickets on shares of technology, they haven’t come down enough to warrant interest in buying the dip,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.
Spooking investors further, St. Louis Federal Reserve Bank President James Bullard warned that inflation could remain elevated for some time to come amid fears higher expectations become entrenched.
Some pockets of the market enjoyed a bounce, with energy stocks jumping 2.3% and utilities adding 0.6%. The S&P 500 banks index edged 0.1% higher, hitting a record high earlier in the session.
Shares of Merck & Co added 2.1%, building on gains from Friday after developing an experimental antiviral pill for those most at risk of contracting severe COVID-19.
Tesla Inc rose 1.5% after it had delivered a record electric cars in the third quarter, beating Wall Street estimates on Saturday.
Wall Street’s main indexes were battered in September, hit by worries about the U.S. debt ceiling, the fate of a massive infrastructure spending bill and the meltdown of heavily indebted China Evergrande Group.
U.S. trade negotiator Katherine Tai pledged to begin unwinding some tariffs imposed by former President Donald Trump on goods from China, while pressing Beijing in “frank” talks in coming days over its failure to keep promises made in the Trump trade deal and end harmful industrial policies.
At 12:07 p.m. ET, the Dow Jones Industrial Average was down 351.25 points, or 1.02%, at 33,975.21, the S&P 500 was down 60.30 points, or 1.38%, at 4,296.74 and the Nasdaq Composite was down 329.03 points, or 2.26%, at 14,237.67.
The first trial of four large pharmacy chains over the deadly U.S. opioid epidemic was set to begin on Monday, pressuring shares of Walgreens Boots Alliance Inc, CVS Health Corp and Walmart Inc, down between 0.1% and 1.2%.
Declining issues outnumbered advancers for a 1.70-to-1 ratio on the NYSE and for a 2.61-to-1 ratio on the Nasdaq. The S&P index recorded 21 new 52-week highs and four new low, while the Nasdaq recorded 59 new highs and 172 new lows.
(Reporting by Shreyashi Sanyal and Devik Jain in Bengaluru; Editing by Maju Samuel)
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