Tech stocks pull market down and erase early gains

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A steep, late-afternoon sell-off in technology companies has pulled US stocks sharply lower, knocking 344 points off the Dow Jones industrial average.

The market slide erased modest gains from earlier in the day and much of a powerful rally from the day before.

Banks also weighed on the market as bond yields declined. Investors bid up shares in safe-play stocks like utilities and property companies.

The market turbulence came a day after the major stock indexes notched their best day in more than two years following a steep slide last week.

“Just looking at the sector performance indicates to me this is a flight-to-safety kind of trade day,” said Sam Stovall, chief investment strategist at CFRA.

“Until we get better guidance as to whether this correction is truly over, we will take a very choppy rise possibly to new highs a few months down the road.”

The Standard & Poor’s 500 index fell 45.93 points, or 1.7%, to 2,612.62. The Dow tumbled 344.89 points, or 1.4%, to 23,857.71. The 30-company average had been down 493 points. A day earlier, it climbed 669 points.

The tech-heavy Nasdaq slid 211.74 points, or 2.9%, to 7,008.81. The Russell 2000 index of smaller-company stocks gave up 30.15 points, or 2%, to 1,513.57.

The major stock indexes appeared to be heading for more gains after their strong finish on Monday, but the rally did not last. Stocks wavered through much of the morning, recovered somewhat by early afternoon, but then veered sharply lower as investors sold shares in Nvidia, Twitter, Facebook and other technology companies.

Nvidia tumbled more than any other stock in the S&P 500 on published reports that the company has temporarily stopped testing its technology for self-driving cars in the wake of a deadly collision last week in Tempe, Arizona, involving an Uber autonomous vehicle and a pedestrian. The chipmaker’s shares lost 18.96 US dollars, or 7.8%, to 225.52 dollars.

Microsoft, which outgained all the other companies in the S&P 500 Monday, gave up 4.31 dollars, or 4.6%, to 89.47 dollars.

Tesla sank 8.2% on news that the National Transportation Safety Board has sent two investigators to look into a fatal crash and fire on Friday in California that involved a Tesla electric SUV.

The agency said on Twitter that it is not clear whether the Tesla Model X was operating on its semi-autonomous control system called Autopilot at the time. The stock lost 25 dollars to 279.18 dollars.

Social media companies also weighed on market. Twitter slumped 12% after Citron Research said it is shorting the company, citing Twitter’s reliance on licensing its users’ data. The remarks come ahead of a Senate hearing on data privacy set for next month. The stock gave up 3.84 dollars to 28.07 dollars.

Facebook, whose shares have been hard hit recently amid heightened government scrutiny into the social media giant’s collection of private user data, also declined, sliding another 7.84 dollars, or 4.9%, to 152.22 dollars. Facebook has lost 20% of its value since hitting a record high February 1.

Bond prices rose, sending the yield on the 10-year Treasury down to 2.78% from 2.85% late on Monday.

The decline in bond yields helped pull banks and other financial stocks lower. When bond yields decline it can bring down interest rates on mortgages and other loans, making them less profitable for banks. Citizens Financial Group lost 1.53 dollars, or 3.5%, to 41.59 dollars.

Lower bond yields helped boost demand for high-yield stocks, such as property investment trusts and utilities. PG&E gained 1.07 dollars, or 2.5%, to 43.94 dollars.

Traders welcomed the latest corporate deal news.

US-listed shares of British drug manufacturer GlaxoSmithKline rose 2.6% after the company agreed to buy out its Swiss partner Novartis in their consumer health joint venture for 13 billion dollars in cash. GlaxoSmithKline gained 96 cents to 38.39 dollars.

Benchmark US crude declined 30 cents to settle at 65.25 dollars a barrel on the New York Mercantile Exchange. Brent crude, used to price international oils, slipped a penny to close at 70.11 dollars.

In other energy futures trading, heating oil dropped 1 cent to 2.02 dollars a gallon. Wholesale gasoline was little changed at 2.01 dollars a gallon. Natural gas rose 7 cents, or 2.8%, to 2.69 dollars per 1,000 cubic feet.

Gold fell 13 dollars, or 1%, to 1,342 dollars an ounce. Silver dropped 14 cents to 16.54 dollars an ounce. Copper gained 3 cents to 3 dollars a pound.

The dollar rose to 105.54 yen from 105.22 yen on Monday. The euro fell to 1.2402 dollars from 1.2455 dollars.

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