GLOBAL MARKETS-Stocks tumble on tech weakness, dollar gains
*U.S. initial jobless claims rise less than expected. Investors have been concerned about the narrowing leadership of the market rally that pushed the S&P 500 up 60% from its March 23 low through Wednesday, with Wall Street gains largely driven by names such as Apple Inc and Microsoft Corp. Signs the U.S. economy’s rebound from coronavirus-driven lockdowns…
(Updates with close of European markets)
* Stocks fall on tech sell-off
* Dollar adds to gains, euro retreats to $1.18
* U.S. initial jobless claims rise less than expected
By Chuck Mikolajczak
NEW YORK, Sept 3 (Reuters) – A gauge of global stockstumbled on Thursday from a record high in its biggest one-daydecline in nearly three months as the technology sector soldoff, while the dollar continued its bounce from more thantwo-year lows.
The S&P technology sector, up more than 30% on theyear as the best-performing of the 11 major sectors, plunged5.40% as investors looked for cheaper stocks in other areas. Thegroup contains some of the world’s largest publicly tradedcompanies.
Investors have been concerned about the narrowing leadershipof the market rally that pushed the S&P 500 up 60% from itsMarch 23 low through Wednesday, with Wall Street gains largelydriven by names such as Apple Inc and Microsoft Corp.
“We have a narrow market rally. Narrow markets begetfragility. When the narrow-rallying names sell off the indexesare going to sell off,” said Brian Battle, director of tradingat Performance Trust Capital Partners in Chicago.
Signs the U.S. economy’s rebound from coronavirus-drivenlockdowns could be stalling in the absence of another round offiscal stimulus also weighed.
While weekly initial jobless claims fell more thananticipated, they remained extremely high. In addition, themethodology used in the weekly report to address seasonalfluctuations has changed, which analysts said led to fewerclaims than over the past two months.
Investors will closely watch Friday’s August employmentreport for further signs of labor market stagnation.
Other data showed slower growth in the services sector lastmonth, as the boost from fiscal stimulus and business reopeningsfaded, although it remained above the level signifying growth.
The Dow Jones Industrial Average fell 795.56 points,or 2.73%, to 28,304.94, the S&P 500 lost 123.59 points,or 3.45%, to 3,457.25 and the Nasdaq Composite dropped567.14 points, or 4.7%, to 11,489.30.
Chicago Federal Reserve President Charles Evans said onThursday that Congress needs to deliver more fiscal aid andindicated U.S. monetary policy would be eased further andinterest rates kept at ultra-low levels for years to help theeconomy recover its pre-pandemic strength.
European shares closed 1.4% lower after rising more than1.2% as weakness in tech names spread, with the groupfalling 3.76%% in its biggest one-day decline since April 21.
The pan-European STOXX 600 index lost 1.40% andMSCI’s gauge of stocks across the globe shed2.47%. MSCI’s index was on pace for its biggest one-daypercentage drop since June 11 after closing at a record high of594.06 on Wednesday.
The dollar continued to bounce, but gave up some gains afterthe weekly claims data, while the euro continued its recentslide to dip as low as $1.1789 after climbing as high as $1.20earlier in the week after the European Central bank expressedconcerns about its rapid rise.
The dollar index rose 0.135%, with the eurodown 0.1% to $1.1841.
Benchmark 10-year U.S. Treasury notes last rose9/32 in price to yield 0.6234%, from 0.651% late on Wednesday.
Oil prices weakened, with both Brent and WTI crude hittingone-month lows on worries about weaker U.S. gasoline demand anda slowdown in the economic recovery.
U.S. crude recently fell 0.29% to $41.39 per barreland Brent was at $44.11, down 0.72% on the day.
(Additional reporting by Sinéad Carew; Editing by Dan Greblerand Richard Chang)
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