Technology stocks drag U.S. indexes lower; Italy also falls

Marley Jay, The Associated Press</span>
Published Monday, October 8, 2018 6:46AM EDT
Last Updated Monday, October 8, 2018 12:14PM EDT

NEW YORK -- U.S. stocks are sinking again Monday, and technology companies are taking some of the biggest 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 16 points, or 0.6 per cent, to 2,869 as of 11:52 a.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 143 points, or 0.5 per cent, to 26,303.

The Nasdaq composite lost 105 points, or 1.4 per cent, to 7,682. The Russell 2000 index slid 11 points, or 0.7 per cent, to 1,620. 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.

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.

EARLY LOSERS: Technology companies were broadly lower. Salesforce fell 4.6 per cent to $147.87 and Apple dropped 1 per cent to $221.98.

Payment and credit card companies took especially sharp losses. Mastercard fell 3.4 per cent to $205.98 and Global Payments skidded 3.7 per cent to $117.28. PayPal retreated 4.4 per cent to $79.55.

Netflix pulled internet companies lower as it declined 2.3 per cent to $343.22.

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 1.3 per cent and the CA 40 in France sank 1.1 per cent. In Britain, the FTSE 100 fell 1 per cent.

The euro sank to $1.1472 from $1.1525.

BRAZIL BOUNCE: Brazil's main stock index rose 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 that makes him a favourite in the final round of voting later this month.

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. The candidate has repeatedly said he doesn't understand the economy and has also spoken approvingly of Brazil's 1964-1985 dictatorship.

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 113.24 yen from 113.73 yen late Friday.

COMMODITIES: Benchmark U.S. crude slid 0.4 per cent to $74.01 a barrel in New York and Brent crude, used to price international oils, dropped 0.6 per cent to $83.66 a barrel in London.

Gold lost 1.5 per cent to $1,187.50 an ounce and silver slipped 2.4 per cent to $14.30 an ounce.

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