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July 6, 2017, 4:43 p.m. EDT

U.S. stocks close sharply lower on extended selloff in tech sector

Tesla stock falls into bear market territory, tops Nasdaq losers

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By Sue Chang and Anora Mahmudova, MarketWatch


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Tesla shares were battered for a third session on Thursday.

U.S. stocks closed lower Thursday as investors continued to rotate out of battered technology names. A combination of geopolitical jitters and growing signs that global central banks are inching closer to unwinding policies that have helped to support both stocks and government bonds is also weighing on the broader market.

A round of economic data, including readings on private-sector payrolls and weekly layoffs, did little to soothe worries about the expected muted pace of the Federal Reserve’s policy plans.

The S&P 500 /zigman2/quotes/210599714/realtime SPX -0.56%  dropped 22.79 points, or 0.9%, to finish at 2,409.75 with all 11 sectors ending in negative territory. Telecoms and real-estate shares led the declines.

The Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +0.53%  fell 61.39 points, or 1%, to close at 6,089.46.

The general shift from tech to other stocks that began in early June is still in play, according to Mike Antonelli, equity sales trader at Robert W. Baird & Co.

“The rotation out of tech is dominating stocks and is the overarching theme in the market,” he said. “People should not mistake rotation for volatility, and I am not terribly freaked out as investors are not selling everything equally.”

Kent Engelke, chief economic strategist at Capitol Securities Management Inc., said the market’s moves are likely magnified by the selling pressure in technology stocks, given how widely they are held.

“Technology has four times greater impact on the averages than oil because of technology’s massive percentage of the capitalization of the S&P,” he said. “The amount of monies required to keep the megasized technology growth issues at current levels is gargantuan.”

The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -1.39%  dropped 158.13 points, or 0.7%, to close at 21,320. General Electric Co . /zigman2/quotes/208495069/composite GE -4.08% and Intel Corp. /zigman2/quotes/203649727/composite INTC -0.32%   were down sharply.

Read: B. of A. warns the rise of ETFs is distorting the stock market

“There are a lot of things keeping risk appetite in check,” said Chris Beauchamp, senior market analyst at IG in London. “Geopolitical worries are beginning to bear down” on Wall Street and in Europe /zigman2/quotes/210599654/delayed XX:SXXP +0.29% , where losses in regional benchmarks accelerated Thursday, he said.

Investors are also increasingly becoming skittish due to escalating tensions surrounding North Korea’s test launch this week of an intercontinental ballistic missile, sparking a “broader move out of equities back to bonds” as they sought assets considered havens, Beauchamp said.

President Donald Trump said Thursday in Warsaw that he’s considering “some pretty severe things” in response to North Korea’s ongoing efforts to develop nuclear weapons that can reach the U.S.

Read: U.S., Russia clash at U.N. over approach to North Korea threat

“The market is not getting too panicky just yet, but you’re into that July, August, September period where we could see a bit of a grind,” he added.

/zigman2/quotes/210599714/realtime
US : S&P US
3,152.05
-17.89 -0.56%
Volume: 2.60B
July 9, 2020 5:11p
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/zigman2/quotes/210598365/realtime
US : U.S.: Nasdaq
10,547.75
+55.25 +0.53%
Volume: 3.61M
July 9, 2020 5:16p
loading...
/zigman2/quotes/210598065/realtime
US : Dow Jones Global
25,706.09
-361.19 -1.39%
Volume: 389.18M
July 9, 2020 5:11p
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/zigman2/quotes/208495069/composite
US : U.S.: NYSE
$ 6.58
-0.28 -4.08%
Volume: 74.75M
July 9, 2020 4:00p
P/E Ratio
9.89
Dividend Yield
0.61%
Market Cap
$60.01 billion
Rev. per Employee
$429,735
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/zigman2/quotes/203649727/composite
US : U.S.: Nasdaq
$ 58.42
-0.19 -0.32%
Volume: 20.68M
July 9, 2020 4:00p
P/E Ratio
11.31
Dividend Yield
2.26%
Market Cap
$248.15 billion
Rev. per Employee
$659,665
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/zigman2/quotes/210599654/delayed
XX : STOXX
364.68
+1.04 +0.29%
Volume: 0.00
July 10, 2020 12:06p
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