A Rare Tumble for Tech Stocks Pulls U.S. Indexes Lower


Technology stocks slammed into reverse on Monday, and the losses overshadowed gains in other areas of the market to send broad U.S. indexes lower.

Treasury bond prices and gold rose, meanwhile, as investors looked for safer places for their money following the latest escalation in the heated rhetoric between the United States and North Korea. Stock markets around the world were mixed after the leader of Europe’s largest economy retained her position, though her political strength may have weakened.

The Standard & Poor’s 500 index dropped 5.56 points, or 0.2 percent, to 2,496.66. The Dow Jones industrial average fell 53.50 points, or 0.2 percent, to 22,296.09, and the Nasdaq composite dropped 56.33, or 0.9 percent, to 6,370.59. Smaller stocks held up better than the rest of the market, and the small-cap Russell 2000 index rose 1.18, or 0.1 percent, to 1,451.96.

The day’s action was centered around the technology sector, and tech stocks in the S&P 500 lost 1.4 percent. That’s more than three times the loss of any of the other 10 sectors that make up the index, and the losses were broad: Facebook fell 4.5 percent, Nvidia lost 4.5 percent and video-game developer Electronic Arts lost 3.6 percent.

Any stumble for tech this year has been notable given how much better it’s done than the rest of the market. Tech stocks in the S&P 500 have jumped 23 percent in 2017, double the S&P 500’s gain.

As investors moved out of tech stocks on Monday, some money flowed into areas of the market that haven’t done as well.

Energy stocks, which have been the worst performers in the S&P 500 this year, had the day’s strongest gains. Marathon Oil gained 3.1 percent, for example, and Noble Energy rose 2.7 percent.

They rose with the price of oil, which has been holding above $50 per barrel in recent days after spending most of the summer below that level. Benchmark U.S. crude rose $1.56 to settle at $52.22, and Brent crude, the international standard, jumped $2.16 to $59.02 a barrel.

Prices for Treasury bonds jumped after North Korea’s foreign minister made his comments. That in turn pushed down yields.

The yield on the 10-year Treasury note fell to 2.21 percent from 2.25 percent late Friday. The two-year fell to 1.41 percent from 1.44 percent, and the 30-year dipped to 2.76 percent from 2.78 percent.

The price of gold had been down in morning trading, but it quickly reversed course following the North Korean statement. It rose $14 to $1,311.50 per ounce.

Silver gained 16 cents to $17.15 per ounce, and copper lost a penny to $2.94 per pound.

Natural gas dropped 4 cents to $2.92 per 1,000 cubic feet, heating oil rose 4 cents to $1.86 per gallon and wholesale gasoline added 5 cents to $1.72 per gallon.

In overseas markets, Germany’s DAX index was virtually flat after Chancellor Angela Merkel won a fourth term. Merkel’s party and its allies, though, lost some seats as they turned in one of their weakest postwar results. The results sent the euro lower and underscored the challenge Merkel has in forming a coalition with new partners to lead Europe’s biggest economy.

The CAC 40 fell 0.3 percent in Paris, and the FTSE 100 dipped 0.1 percent in London.

In Asia, Japan’s Nikkei 225 rose 0.5 percent, South Korea’s Kospi slipped 0.3 percent and Hong Kong’s Hang Seng fell 1.4 percent.

The euro fell to $1.1846 from $1.1941 late Friday, and the British pound slipped to $1.3470 from $1.3527. The dollar fell to 111.61 Japanese yen from 112.05 yen.

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