VIEW ONLINE Stocks wipe out 2018 gains as FAANG stocks slide into a bear market
- Stocks erased gains for the year Tuesday, 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 gains 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 about 1.6%, nearing a seven-month low, while the S&P 500 shed 1.7%. The Dow Jones Industrial Average tumbled more than 2%, or about 500 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 FANG 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 1.3% Tuesday.
The Wall Street Journal reported Monday that 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.
Other retailers — including Kohl’s (-8.9%) and Macy’s (-3.8%) — were sharply lower following the results, bringing the SPDR S&P Retail ETF down about 3%. Victoria’s Secret-parent company L Brands, which cut its annual dividend in half a day earlier, shed nearly 15%.
Best Buy, on the other hand, rose more than 1% 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.
Oil prices hit their lowest level since 2017, sliding further into a bear market amid concerns about oversupply. West Texas Intermediate fell 7% to $53.27 per barrel, while the international benchmark Brent shed 7.4% to just above $62 a barrel.
Yields on the 10-year note were slightly lower at 3.048%. The dollar jumped 0.3% against a basket of currencies.
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