US stocks end sharply lower, Dow down 2.3%, Nasdaq down 4.1%

US stocks closed lower as tech stocks extended their sell-off to send the Nasdaq into correction territory, while Tesla suffered its biggest daily percentage drop after the stock was passed over for inclusion in the S&P 500.
A street sign is seen in front of the New York Stock Exchange on Wall Street, New York.
A street sign is seen in front of the New York Stock Exchange on Wall Street, New York.PHOTO: REUTERS

NEW YORK (AFP) - Wall Street stocks finished sharply lower on Tuesday (Sept 8), with large tech shares suffering another drubbing in a broadening sell-off that also hit energy and financial companies.

The Dow Jones Industrial Average dropped 2.3 per cent, or around 630 points, to close at 27,500.89.

The broad-based S&P 500 shed 2.8 per cent to 3,331.84, while the tech-rich Nasdaq Composite Index slumped 4.1 per cent to 10,847.69.

The Nasdaq has declined 10 per cent in the last three sessions after hitting the last in a series of records on Sept 2.

Jack Ablin, chief investment officer at Cresset Capital, said Tuesday's session marked a shift from the dynamic late last week in that the selling went far beyond the tech shares.

"Investors aren't just shifting their deck chairs around," Ablin said. "They're worried about a recovery that's not gaining strength."

Unlike last week, US Treasury yields fell on Tuesday, while oil prices fell sharply, indicators of the rising concern, Ablin said.

"It's more of an economic slowdown story," he said.

Analysts cited mounting US-China tensions and a stalemate in Washington over another round of stimulus funding as factors in the pullback, along with profit taking following earlier gains.

Countering those dynamics have been economic data such as last week's jobs report that has generally topped expectations.

Major tech companies like Apple and Amazon again suffered deep declines, along with Tesla, which plunged 21.1 per cent after the S&P 500 did not add the electric car company to its index late last week, disappointing investors who had acquired shares in anticipation of the move.

Among other individual companies, electric truck company Nikola shot up 40.8 per cent after announcing a partnership with General Motors. Under the partnership, GM will receive an 11 per cent stake in the firm in exchange for providing technology and manufacturing. GM jumped 7.9 per cent.

Boeing dropped 5.8 per cent after it revealed more problems with the 787 Dreamliner that will delay deliveries of the plane, adding to the company's woes in a depressed air travel market.