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Overnight Markets: Tech stocks drag Wall Street sharply lower

Overnight Markets: Tech stocks drag Wall Street sharply lower

US stocks retreated sharply on Monday as investors dumped Apple, internet-related companies and other technology shares, dragging the market lower.

The Dow Jones Industrial Average fell 396 points, or 1.56%, to 25,017, the S&P 500 lost 46 points, or 1.67%, to 2,691 and the Nasdaq Composite dropped 219 points, or 3.03%, to 7,028.

Investors focused again on trade tensions between the US and China after the two countries clashed at a Pacific Rim summit over the weekend.

The main equity benchmarks saw losses accelerate in morning trade after a report showed home-builders’ confidence plummeted in November.

Apple fell 4% on renewed worries that iPhone sales could slow, Microsoft lost 3.4% and Amazon gave back 5.1%.

Among tech and internet stocks, chipmaker Nvidia fell another 21%. Nvidia said last week that it had a large number of unsold chips because of a big drop in mining of cryptocurrencies. Facebook sank 5.7% and Netflix lost 5.6%.

A steep loss for Boeing, a major exporter which would stand to suffer greatly in a protracted trade war, weighed heavily on the Dow. Boeing gave up 4.5%. Industrial companies and retailers also stumbled. Caterpillar fell 3.1% and Nike lost 3%.

US-traded shares of Nissan lost 5.8% after the company said its chairman, Carlos Ghosn, was arrested on Monday and will be dismissed from the company after allegedly under-reporting his income.

However, high-dividend stocks like real estate companies and utilities, which investors favour when they are fearful of market turmoil, held up better than the rest of the market.

In Asia, shares declined on Tuesday in morning session, extending the sharp overnight losses on Wall Street.

Japanese benchmark Nikkei 225 was down 0.74% and the Topix index fell 0.5%. In South Korea, the Kospi slipped 0.75%. Australia's ASX 200 was down 0.81% in afternoon trade.

The mainland Chinese markets also slipped into negative territory in early trade. Both the Shanghai composite and the Shenzhen composite were lower by about 1%. Hong Kong's Hang Seng index also fell 1.5%.   

 

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