- US stocks erased their gains for the year in Tuesday trade, dragged lower by the biggest technology companies.
- FAANG stocks entered a bear market, marking the first in seven years for Google parent Alphabet.
- Follow the US indexes in real time here.
Wall Street erased stocks’ gains for the year Tuesday as high-flying technology companies plummeted into a bear market, adding to fears about slowing growth and trade tensions.
The tech-heavy Nasdaq Composite dropped 1.7% to a seven-month low, while the S&P 500 shed 1.74%. The Dow Jones Industrial Average tumbled more than 2%, or about 550 points.
“Last week saw a pullback following a strong two-week period, as investors are displaying confused behavior that is consistent with the market forming a bottom,” said Mark Hackett, chief of investment research at Nationwide. “We saw similar activity in the spring of the year. This week will be interesting, as volume will likely be limited, causing exaggerated moves.”
The so-called FAANG stocks — Facebook, Amazon, Apple, Netflix and Google-parent company Alphabet — slipped further after on Monday dipping into a bear market, down more than 20% from June highs. Alphabet’s descent marked its first bear market in seven years. The FANG+ Index was down about 1.5% Tuesday.
The Wall Street Journal reported Monday that Apple, the world’s largest technology company, slashed production orders in recent weeks for all three of its new iPhones unveiled in September.
Not helping the mood, Target dropped more than 11% after reporting weaker-than-expected quarterly earnings and same-store sales ahead of the holiday season. Lowe’s posted earnings that beat expectations, but announced it plans to shut down retail operations in Mexico.
Other retailers — including Kohl’s (-8.77%) and Macy’s (-3.31%) — were sharply lower following the reports, dragging the SPDR S&P Retail ETF down 3.38%. Victoria’s Secret-parent company L Brands, which cut its annual dividend in half a day earlier, shed more than 17%.
Best Buy, on the other hand, rose more than 2% after topping earnings, revenue and sales estimates in the third quarter.
Chipmakers also continued to drop, a day after China accused Samsung Electronics, SK Hynix and US-based Micron Technology of competition violations.
The S&P 500 energy index fell more than 3% after oil prices hit their lowest level since 2017, sliding further into a bear market amid concerns about oversupply. West Texas Intermediate fell 6.8% to $53.30 per barrel, while the international benchmark Brent shed 6.9% to $62.36 a barrel.
The yield on the 10-year note was slightly lower at 3.056%, and the dollar jumped 0.66% against a basket of currencies.