US stocks back in the red as Apple slumps

Traders work on the floor of the New York Stock Exchange, on Sept 23, 2022, in New York City. PHOTO: AFP

NEW YORK (AFP) - Wall Street stocks suffered another ugly rout on Thursday as US bond yields resumed their upward climb on a bruising day for shares of Apple and other tech giants.

Thursday's economic reports included data showing a drop in weekly US jobless claims that point to a strong labour market likely to keep the Federal Reserve focused on its current policy of countering inflation.

"Risky assets don't stand a chance of a meaningful rally if the economy continues to show resilience while inflation continues to be significantly above the Fed's Funds rate," said Oanda's Edward Moya.

The broad-based S&P 500 dropped 2.1 per cent to 3,640.47, its lowest close since November 2020.

The Dow Jones Industrial Average lost 1.5 per cent at 29,225.61, while the tech-rich Nasdaq Composite Index tumbled 2.8 per cent to 10,737.51.

FHN Financial's Chris Low said investors were also unnerved by market volatility in Britain after Prime Minister Liz Truss doubled down on a controversial tax cut policy that has rattled markets.

Investors fear a "contagion" beyond Britain in response to the policy proposal, Low said, noting the Truss plan contradicts the efforts of central banks to counter inflation and has been criticised by the International Monetary Fund.

Shares of large technology companies were under pressure after a downgrade of Apple by Bank of America based on expectations of slower growth.

Apple dropped nearly 5 per cent and Facebook parent Meta lost 3.7 per cent, while Tesla sank 6.8 per cent.

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