US STOCKS-Tech tumble jams Wall Street into reverse; sharpest fall since June

NEW YORK, Sept 3- Wall Street’s main indexes closed sharply lower on Thursday, marking their deepest one-day declines since June as investors dumped the high-flying technology sector, while economic data highlighted concerns about a long and difficult recovery. The Nasdaq’s biggest drags came from heavyweights Apple Inc, Microsoft Inc, Inc, Tesla…

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* VIX jumps to highest point since June, closes belowsession high

* Weekly jobless claims slip below 1 mln

* Tesla drops for third straight day

* Indexes fall: Dow 2.78%, S&P 3.51%, Nasdaq 4.96%(Adds market details, final closing prices, volume)

By Sinéad Carew

NEW YORK, Sept 3 (Reuters) – Wall Street’s main indexesclosed sharply lower on Thursday, marking their deepest one-daydeclines since June as investors dumped the high-flyingtechnology sector, while economic data highlighted concernsabout a long and difficult recovery.

The Nasdaq led the pullback with a decline of almost 5% aday after it and the S&P 500 posted record closing highs.

The Nasdaq’s biggest drags came from heavyweights Apple Inc, Microsoft Inc, Inc, TeslaInc and Nvidia Corp.

The S&P tech sector and the Philadelphia chipindex both fell almost 6% on the day.

Markets had soared from March lows, powered by fiscal andmonetary support hopes for a swift economic recovery. But someparticipants said investors had become too optimistic.

“Think about the mounting number of risks the market hasbeen shrugging off over the last couple of months here,” saidEmily Roland, co-chief investment strategist and John HancockInvestment Management. “We’re 60 days away from the election.That may be an area where investors are getting a bit spooked.”

She added: “Looking at the data today, the market has hadthe ability to power higher and hasn’t paid any attention to amacro environment which, yes, is improving which is encouraging,but the economy remains fragile here.”

Earlier in the day, data showed the number of Americansfiling new claims for unemployment benefits fell more thanexpected last week, but remained extraordinarily high. The nextbig data focus for investors is Friday morning’s monthlypayrolls report.

Separately, a survey showed U.S. services industry growthslowed in August, likely as the boost from the reopening ofbusinesses and fiscal stimulus faded.

The Dow Jones Industrial Average fell 807.77 points,or 2.78%, to close at 28,292.73, the S&P 500 lost 125.78points, or 3.51%, to 3,455.06 and the Nasdaq Compositedropped 598.34 points, or 4.96%, to 11,458.10.

While S&P and Nasdaq’s percentage declines on Thursday weretheir deepest since June 11, it was the Dow’s biggest one-dayplunge since June 26.

It was the Nasdaq’s third-biggest one-day fall from a recordclose, according to data from Bespoke Investment Group.

Wall Street’s fear gauge crossed its 200-day movingaverage to hit its highest level in weeks. It closed up 7 pointsat 33.60.

Still, some investors seemed unconcerned in the face of thesell-off.

“(Investors) are in love with tech stocks and it’s going totake more than this for them to fall out of love with them,”said Mike Zigmont, head of trading and research at HarvestVolatility Management in New York.

Sebastian Leburn, senior portfolio manager at Boston Privatein Florida, said the decline was “just a rotation” out oftechnology stocks: “I don’t think it’s anything ominous.”

Another key Nasdaq component, Tesla Inc, tumbled9% on Thursday after falling sharply the previous two sessions.

PVH Corp rose 3.3% after the Calvin Klein ownerposted a surprise quarterly profit, boosted by strong onlinedemand for comfortable and casual clothing during thecoronavirus-led shift to work from home.

Declining issues outnumbered advancing ones on the NYSE by a4.14-to-1 ratio; on Nasdaq, a 4.20-to-1 ratio favored decliners.

The S&P 500 posted 18 new 52-week highs and no new lows; theNasdaq Composite recorded 24 new highs and 53 new lows.

About 11.98 billion shares changed hands in U.S. exchanges,compared with the 9.22 billion daily average over the last 20sessions.(Reporting by Sinead Carew in New YorkAdditional reporting by Chuck Mikolajczak, Terence Gabriel,Reuters market analyst, Medha Singh and Devik Jain in BengaluruEditing by Maju Samuel and Matthew Lewis)

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