US stocks sink; Nasdaq drops 2.4 per cent

NEW YORK (AFP) - US stocks fell sharply Wednesday with Nasdaq suffering the deepest declines on worries that technology and biotech stocks have become overvalued.

At the closing bell, the tech-rich Nasdaq Composite Index, which stood above 5,000 on Monday, was at 4,876.52, down 118.21 points (2.37 per cent).

The Dow Jones Industrial Average sank 291.27 (1.62 per cent) to 17,719.87, while the broad-based S&P 500 fell 30.31 (1.45 per cent) 4,876.52.

Analysts cited growing concerns that biotech shares in particular have risen to unjustifiably high levels behind clinical results for drugs that will not hit the market for many years.

Biogen shed 4.7 per cent, while Celgene lost 4.2 per cent.

Further selling has been spurred by end-of-quarter profit-taking, said Peter Cardillo, chief market economist at Rockwell Global Capital.