Wall Street sinks on deepening tech woes

VIDEO: REUTERS

NEW YORK (AFP) - Wall Street edged lower on Wednesday (March 28), with the Nasdaq sinking amid continued misfortunes among leading tech companies.

The rocky trading session saw stocks in and out of negative territory as they struggled to right themselves after tumbling in three of the last four trading days, leaving them with declines of 2 and 4 per cent since Thursday.

The benchmark Dow Jones Industrial Average ended essentially flat, down less than a tenth of a percentage point at 23,848.42, but the broader S&P 500 fell 0.3 per cent to 2,605.00.

The heaviest losses occurred on the Nasdaq, as the tech-heavy index lost 0.9 per cent, battered by more negative headlines.

Amazon fell 4.4 per cent following a media report saying President Donald Trump dislikes the company and wanted to make the online retail behemoth to pay higher taxes.

The White House said Wednesday no policies concerning Amazon were currently in the works but this did little to lift the company's share price.

Facebook scraped out a 0.5 per cent gain after days of heavy losses but the continued woes for Silicon Valley giants have weighed on investor sentiment for the sector that buoyed markets through much of the 2017 rally.

"The big question on the markets right now is how much regulation we will see on the tech sector," said Quincy Krosby of Prudential.

Tesla Motors, another Nasdaq player, tumbled 7.7 per cent after the ratings agency Moody's downgraded its debt grade to junk status on a production shortfall and negative cash flow. That came on top of the most recent crash involving a Tesla likely to have been using Autopilot.

Fresh economic data showed the economy grew faster than previously reported in the final quarter of 2017, with consumer spending getting its biggest bump in three years.

Markets seemed preoccupied with more pressing matters but analysts said the rosy report was a double-edged sword, possibly helping encourage the central bank to tighten monetary policy.

"This is good and bad in that it gives the Federal Reserve a green light for rate hikes," said Ken Berman of Gorilla Trades.