LOS ANGELES (AP) – Technology and internet stocks have led the way for much of Wall Street’s bull market run, propelling the stocks of big names like Apple, Amazon and Google’s parent company sharply higher along the way.
Now those high-flying stocks are at the forefront of a wave of selling as investors fret about the possible impact of a recent surge in interest rates.
Those jitters gave the Nasdaq composite index, which as a high concentration of technology companies, its biggest loss in more than two years Wednesday. It extended its slide Thursday and has fallen 9.6 percent since it set a record high in late August.
Apple, Microsoft, and Netflix have posted steep declines. Amazon and Google-parent Alphabet, respectively the second- and fourth-most valuable U.S. companies, have fallen more than 10 percent from their recent peaks. Facebook, the sixth-largest company, has shed 29 percent since late July.
“The sell-off was perhaps a little overdone,” said Lindsey Bell, investment strategist at CFRA. “A lot of it may have been investors just kind of taking profits in some of the high-flyers of the year that also have high valuations.”
The yield on the 10-year Treasury jumped from 3.05 percent early last week to more than 3.20 percent Wednesday, a seven-year high. It dipped to 3.15 percent Thursday.
Specialist John O’Hara works on the floor of the New York Stock Exchange, Thursday, Oct. 11, 2018. Stocks are slumping for a second straight day as the market endures its most volatile stretch since February. (AP Photo/Richard Drew)
Interest rates tend to follow increases in bond yields, eroding profits