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Tech Stocks Suffer Their Worst Day in More Than 7 Years
A bad day for the markets on Wednesday was especially brutal for tech stocks, which suffered its worst day since 2011.
The S&P 500 Information Technology Index closed down 4.8 percent, which marks its biggest plunge since Aug. 18, 2011, according to CNBC. Meanwhile, the broader S&P 500 fell 3.3 percent and the Dow Jones Industrial Average dropped 3.2 percent.
The tech sector includes the largest companies by market cap in the U.S. and those that have been the biggest contributors to the extended rally. Shares of Apple, Microsoft and Amazon are up sharply for the year as investors bet they will continue to deliver strong earnings growth and take market share.
However, the same names have been susceptible to steep declines during periods of heavy selling as investors rotate into safer investments like bonds. Microsoft fell 5.4 percent, and Apple dropped 4.6 percent. Amazon, which is not a constituent of the S&P tech index, fell 6.2 percent, and Alphabet declined 4.6 percent.
Wednesday’s big drop points to a larger slump for Wall Street: By midday trading, 295 of the S&P’s 505 components had plunged into correction territory, CNBC reports. That means that more than half of the index – or 58 percent – “have fallen by 10 to 20 percent from their 52-week highs.”
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