The selling came as the odds lengthen that Congress will deliver more aid to the economy before November’s elections, support that many investors say is crucial after federal unemployment benefits and other stimulus expired. Partisan disagreements on Capitol Hill have kept Congress at a seeming impasse.
Nicholas Mapa, senior economist at ING, said risk aversion was dominating Asian trading with the technology sector weighing on overall sentiment.
“Investors are struggling to find a catalyst to reverse the recent downtrend with the much-anticipated U.S. fiscal stimulus bill still in limbo,” he said.
Tech stocks accounted for the biggest share of the broad selloff on Wall Street. The sector has been at the center of the market’s swings, hurt by criticism that their recession-defying surge in recent months was overdone.
The S&P 500 fell 59.77 points to 3,339.19, its fourth decline in five days. The index is on pace for its second straight weekly loss. The Dow Jones Industrial Average dropped 405.89 points, or 1.5%, to 27,534.58. The Nasdaq gave up 221.97 points to 10,919.59. The Russell 2000 index of smaller company stocks lost 18.73 points, or 1.2%, to 1,507.75.
Thursday’s selling followed a batch of new economic data on jobs and wholesale prices. The government said 884,000 workers applied for unemployment benefits last week. The number was flat from last week’s number, which was revised higher, and it’s the lowest it’s been since the number of layoffs began exploding in March due to the coronavirus pandemic.