USA Today
NEW YORK — Tech stocks took another giant step backward yesterday as a wave of heavy selling sparked by inflation fears dragged the Nasdaq composite to its lowest close in almost two years.
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| Concern was visible on the faces of Basilios Papanastoy, left, Thomas Wagner, right, and other traders in the S&P 100 options pit at the Chicago Board Options Exchange as they signaled trades.
Associated Press |
The index fell sharply for the third consecutive session, skidding 49.41 points, or 2.1 percent, to 2268.94, a level not seen since March 1999. The Nasdaq, which soared 12.2 percent in January, is now down 8.2 percent this year.
Hope for a swift recovery for ailing tech stocks is starting to slip away. "There is a wholesale dumping of stocks right now," says Pat Adams, portfolio manager at Choice Funds.
The tech-rich Nasdaq composite index is now down 55 percent from its March 2000 high and is closing in on its worst bear market ever — a 60 percent plunge in 1973-74, InvesTech research says.
"People are nervous," says Andy Brooks, head trader at T. Rowe Price. "The losses are pretty painful."
Yesterday’s selling spread to blue chips. The Dow Jones industrials plunged 204.30 points to 10,526.58.
The catalyst? A spike in inflation. The consumer price index rose 0.6 percent in January, double what economists had expected. The jump spooked investors worried about whether a sharp interest rate cut is coming.
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