Technology stock losses mount as U.S. indexes fall further

Marley Jay, The Associated Press</span>
Published Monday, October 8, 2018 6:46AM EDT
Last Updated Monday, October 8, 2018 1:24PM EDT

NEW YORK -- U.S. stocks are falling sharply for the third day in a row Monday as technology companies again take steep losses. Stocks are coming off two weeks of declines, and a big jump in bond yields startled investors last week.

Stocks in Europe are falling after Italy's new deputy premier said the government won't deviate from its plan to increase spending. U.S. bond markets are closed for the Columbus Day holiday.

KEEPING SCORE: The S&P 500 index gave up 22 points, or 0.8 per cent, to 2,862 as of 1 p.m. Eastern time. It fell 1.5 per cent over the previous two weeks and is on track for its lowest close since late August. The Dow Jones Industrial Average fell 170 points, or 0.6 per cent, to 26,276.

The Nasdaq composite lost 133 points, or 1.7 per cent, to 7,654. The Russell 2000 index slid 14 points, or 0.9 per cent, to 1,618. The Nasdaq and Russell are each coming off their worst week since late March.

Trading on Wall Street is expected to be light because of Columbus Day. Low trading volume can sometimes lead to large swings in the market.

TECH STOPPED: Technology companies fell further. Salesforce fell 5.3 per cent to $146.89 and Apple dropped 1.3 per cent to $221.42. Microsoft shed 2 per cent to $109.49.

Payment and credit card companies took especially sharp losses. PayPal retreated 4.6 per cent to $79.38. Global Payment skidded 4.2 per cent to $116.70 and Mastercard fell 3.7 per cent to $205.32.

The S&P 500 technology index has fallen almost 5 per cent in the last three days. It finished at a record high Wednesday.

EUROPE: Italy's deputy premier vowed to press ahead with a plan to increase spending and the country's deficit after the European Commission expressed "serious concern" about the notion. Five-Star leader Luigi Di Maio said Saturday "there is no plan B" to a proposal that will increase the deficit to 2.4 per cent of annual gross domestic product next year.

Italy's FTSE MIB dropped 2.4 per cent and Italian bond prices dropped, sending yields higher. Germany's DAX fell 1.4 per cent and the CA 40 in France sank 1.1 per cent. In Britain, the FTSE 100 fell 1.2 per cent.

The euro sank to $1.1481 from $1.1525.

BRAZIL BOUNCE: Brazil's main stock index staged its biggest rally in two years, jumping 3.9 per cent, and was on track for its highest close since May after far-right candidate Jair Bolsonaro led the first round of presidential voting by an unexpectedly wide margin. He's now the favourite in the final election later this month.

Bolsonaro has repeatedly said he doesn't understand the economy and has also spoken approvingly of Brazil's 1964-1985 dictatorship. But business leaders and financial markets approved of Bolsonaro's choice of an esteemed banker as head of his economic team and a fear of the left-leaning policies of the Workers' Party.

BONDS: Bond markets were closed. The yield on the 10-year Treasury note, an important benchmark for mortgages and other types of long-term loans, jumped to 3.22 per cent last week. That's its highest in more than seven years.

High-dividend stocks including real estate investment trusts, household goods makers and utilities rose Monday. Those stocks are often treated as an alternative to bonds because of their large payments to shareholders, which are similar to bond yields. The big increase in bond yields sent the stocks lower last week.

ASIA: Beijing injected money into its cooling economy by reducing the level of reserves banks are required to hold, and its central bank told Chinese banks to lend more to entrepreneurs. Chinese leaders are trying to shore up economic growth that began to cool after Beijing tightened lending controls last year to rein in a debt boom. A tariff fight with U.S. President Donald Trump has added to downward pressure on growth.

Hong Kong's Hang Seng retreated 1.4 per cent and the Kospi in South Korea fell 0.6 per cent. Japanese markets were closed for a holiday.

The dollar fell to 112.96 yen from 113.73 yen late Friday.

COMMODITIES: Benchmark U.S. crude slid 0.6 per cent to $73.86 a barrel in New York and Brent crude, used to price international oils, dropped 0.9 per cent to $83.44 a barrel in London.

Gold lost 1.3 per cent to $1,190.20 an ounce and silver slipped 2.2 per cent to $14.33 an ounce.

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