Technology and energy companies led a broad sell-off on Wall Street Thursday that wiped out nearly all of the market’s gains from a strong rally the day before.
The S&P 500 lost 1.8% after having been up briefly by 0.8% in the early going. The slide cut deeply into the benchmark index’s 2% gain on Wednesday. The latest gyrations follow a wild stretch where the S&P 500 careened from its worst three-day slump since June to its best day in nearly three months.
Tech stocks accounted for the biggest share of the broad sell-off. 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 Nasdaq, which is full of tech stocks, slumped 10% from last Thursday through Tuesday and recovered for a 2.7% gain Wednesday. It lost most of that ground Thursday, falling 2% after shedding an early gain.
Health care stocks and companies that rely on consumer spending also took hefty losses. Energy companies fell the most as the price of U.S. crude oil prices dropped 2%. Treasury yields also fell, a sign of caution in the market. The price of gold rose 0.5%.
The market will likely lack any solid direction for the next few months as investors weigh several key issues, said Rod von Lipsey, managing director at UBS Private Wealth Management.