Tech selloff hits US stocks; Nasdaq slumps 2.9 per cent, Dow down 1.4 per cent

VIDEO: REUTERS

NEW YORK (AFP) - Wall Street was back on shaky ground on Tuesday (March 27), with huge declines in technology shares leaving major stock indices sharply lower.

The tech-rich Nasdaq Composite Index dropped 2.9 per cent to 7,008.81.

The Dow Jones Industrial Average fell 1.4 per cent to 23,857.71, while the broad-based S&P 500 shed 1.7 per cent 2,612.62.

Analysts pointed to a cascade of negative stories surrounding leading technology names, including Facebook, Tesla Motors and Twitter.

"You've got large cap tech that led this downdraft," said Art Hogan, chief market strategist at Wunderlich Securities.

"Once this market starts in a direction like this, you're not going to see anybody step in and catch a falling knife."

Tuesday's losses set the market back on the red after Monday's brief surge. Stocks also fell sharply on Thursday and Friday on worries about President Donald Trump's trade policies, but those fears have receded somewhat in the last couple of days.

Facebook dropped 4.9 per cent as the social media company continued to face scrutiny over a customer data scandal. Chief executive Mark Zuckerberg turned down a request by British lawmakers to appear in Parliament but reportedly agreed to testify at a US congressional hearing.

Tesla slumped 8.2 per cent after the National Transportation Safety Board announced it was investigating a fatal crash last week involving a Tesla automobile in California.

Twitter dived 12 per cent after a report from Citron Research warned the company was vulnerable to a regulatory crackdown over its data privacy policies. Citron is known for placing bets on stock price falls.

Google parent Alphabet sank 4.6 per cent after a US appeals court revived Oracle's lawsuit alleging that Google owed billions of dollars in damages over the search engine company's use of Java programming language in its Android smartphone operating system. Oracle lost 2.4 per cent.