Wall Street sinks more than 1% as tech stocks resume slide
By Caroline Valetkevitch (Reuters) - U.S. stocks dropped more than 1% on Thursday as technology-related shares extended a recent decline and as data showed high levels of weekly jobless claims.
By Caroline Valetkevitch
(Reuters) - U.S. stocks dropped more than 1% on Thursday as technology-related shares extended a recent decline and as data showed high levels of weekly jobless claims.
"This has been an amazing recovery represented by a few good tech names," from the March market lows, Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.
"They had an incredible last week of August, and I think this is a rational profit-taking scenario at the moment."
The S&P 500 financials index <.SPSY> fell 1.4%, a day after the Federal Reserve pledged to keep interest rates low for a prolonged period to lift the world's biggest economy out of a pandemic-induced recession. Banks tend to benefit from higher borrowing costs.
Adding to concerns around a stalling recovery, the Labor Department's report showed the number of Americans filing new claims for unemployment benefits fell last week, but remained perched at extremely high levels.
The Dow Jones Industrial Average <.DJI> fell 305.79 points, or 1.09%, to 27,726.59, the S&P 500 <.SPX> lost 52.55 points, or 1.55%, to 3,332.94 and the Nasdaq Composite <.IXIC> dropped 229.56 points, or 2.08%, to 10,820.91.
Fed Chair Jerome Powell laid out a menu of factors - including wage growth, workforce participation and disparities in minority joblessness relative to whites - that must be satisfied before the Fed would view the economy at maximum employment, and thus even consider raising interest rates.
"Investors love when the Fed lowers rates, because they feel that's good for market," Dollarhide said. "But if the Fed says we need to keep rates low for longer, then people start worrying about the economy itself."
General Electric Co
Ford Motor Co
Declining issues outnumbered advancing ones on the NYSE by a 1.86-to-1 ratio; on Nasdaq, a 1.50-to-1 ratio favored decliners.
The S&P 500 posted 7 new 52-week highs and no new lows; the Nasdaq Composite recorded 36 new highs and 16 new lows.
(Additional reporting by Shreyashi Sanyal and Devik Jain in Bengaluru; Editing by Sagarika Jaisinghani, Shounak Dasgupta and David Gregorio)
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