Tech stocks lead Wall Street slump as investors shun risk

US stock indexes keep falling as rates resume their climb

Tech-related stocks were the biggest decliners, the sector shedding 4.0 per cent following an overnight U.S. session in which tech was badly hit, but the heavyweight financial and materials sectors were also deep underwater. Many observers expected that would trigger a sell-off in the stock market as investors flooded their cash into Treasurys.

The biggest driver for the market over the past week has been interest rates, which began spurting higher following several encouraging reports on the economy. "This is a bull market correction". The stock fell 34 percent to 38 cents in morning trading.

The ASX200 was below the 6000-point mark for the first time since early June, while the broader all ordinaries is down 116.9 points, or 1.9 per cent, at 6046.9.

At 9:59 a.m. ET the Dow Jones Industrial Average was down 202.46 points, or 0.77 percent, at 26,228.11, the S&P 500 was down 27.02 points, or 0.94 percent, at 2,853.32 and the Nasdaq Composite was down 129.45 points, or 1.67 percent, at 7,608.57. "As stocks go down, tech goes down more than the stock market", she said.

The 10-year US Treasury yield rose to 3.23 per cent from 3.20 per cent late Tuesday after earlier touching 3.24 per cent. The Fed has predicted that unemployment will remain below 4 per cent through 2020 and inflation is expected to track around 2 per cent, conditions that Federal Reserve chief Jerome Powell called "remarkably positive". The S&P 500 Industrials index has slumped 2.4%, implying that investors are concerned about growth, while the S&P 500 Financials index, off 0.8%, is outperforming, a sign that rising rates are probably still at the top of the market's mind.

Traders were set for losses in Asian stocks after a rout in U.S. equities that deepened late in the day amid investor concern that rising interest rates and trade tensions could hurt company profits.

Oil prices were lower, with the USA benchmark West Texas Intermediate losing nearly $2 to trade at just over $73 United States a barrel.

United States stock exchanges recorded biggest losses in 8 months as rising interest rates made investors flee risky stocks. Only 17 stocks in the S&P 500 wound up with a gain.

Meanwhile struggling retailer Sears was in focus as the Wall Street Journal reported that it was preparing to file for bankruptcy. The stock fell 16.8 per cent to 49 cents. It was more than $40 five years ago.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Friday, Oct. 5, 2018.

Sears has closed hundreds of stores and sold several famous brands or put them on the block as it sees more customers abandon its stores.

Technology shares tumbled on fears of slowing demand, while bond yields ended lower after seeing multi-year highs earlier this week. The stock fell 16.8 percent to 49 cents.

The CAC 40 in France dropped 2.1 percent, Germany's DAX lost 2.2 percent and the FTSE 100 in London fell 1.3 percent. Brent crude, the worldwide standard, lost 65 cents to $84.35.

There were, however, slight lifts for Japan's Nikkei, which added 0.2 per cent, and Hong Kong's Hang Seng, which gained 0.2 per cent. Investors see many of these countries as being vulnerable to higher USA interest rates, which can pull away investment dollars.



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