Binary-news – U.S. stocks extended their selloff from a day earlier as a deluge of mostly downbeat earnings raised investor fears over corporate profit growth.
The Dow Jones Industrial Average fell 2.41%, more than 600 points. The S&P 500 fell 3.18%, more than 80 points, while the Nasdaq Composite fell 4.4%, more than 300 points.
The Dow and Nasdaq erased their gains for the year. The Nasdaq also entered correction territory.
A wave of selling emerged across semiconductor stocks, dragging the broader tech sector lower, after chipmaker STMicroelectronics’ weaker guidance fuelled worries about peak profit growth in the wake of Texas Instruments’ downbeat report a day earlier.
STMicroelectronics (NYSE:STM) slumped about 14% and Texas Instruments (NASDAQ:TXN) fell about 8%. Advanced Micro Devices (NASDAQ:AMD) and Intel (NASDAQ:INTC) fell about 9% and 5%, respectively.
The slump in tech blue chips from intraday lows comes ahead of slew of corporate earnings for the sector. Microsoft (NASDAQ:MSFT) is due Wednesday after the closing bell and Alphabet, Twitter and Amazon (NASDAQ:AMZN) are slated for Thursday.
The S&P 500 Information Technology index fell about 4.0%, while the newly-minted S&P 500 Communication Services index, which includes tech heavyweights like Alphabet (NASDAQ:GOOGL), Facebook (NASDAQ:FB) and Netflix (NASDAQ:NFLX), fell more than 5%.
Concerns over peak earnings was exacerbated as AT&T (NYSE:T), whose quarterly profit fell short of expectations, sending it shares tumbling more than 8%. The wireless carrier blamed the poor results on declining satellite TV sales.
But Boeing (NYSE:BA) offered a sliver of optimism on the earnings front after delivering above-forecast earnings and raising its full-year expectations. It’s shares rose 1.4%
Energy, meanwhile, also kept a lid on gains in the broader market, even as oil prices shrugged off a larger-than-expected rise in crude inventories.
In a sign of fragile sentiment on risk, investors flocked to defensive corners of the market. S&P 500 Utilities and S&P 500 Consumer Staples were up about 2% and 0.5%, respectively.
Sentiment on stocks was also weighed down by economic data showing the slump in U.S. housing activity continued.
New home sales dropped 5.5% last month, nearing a two-year low, the Commerce Department said.
The Fed’s Beige Book, meanwhile, revealed U.S. businesses continued to express concern about steeper materials and shipping costs owing to a tight labor market and uncertainties over the trade environment.
In corporate news, the New York Attorney General reportedly filed a lawsuit against Exxon Mobil (NYSE:XOM), alleging the company had misled investors by downplaying the risk of climate change, CNBC reported. Its shares fell about 3.0%.
Top S&P 500 Gainers and Losers Today:
Varian Medical Systems (NYSE:VAR), DTE Energy (NYSE:DTE) and Juniper Networks (NYSE:JNPR) were among the top S&P 500 gainers for the session.
DXC Technology (NYSE:DXC), Robert Half International (NYSE:RHI) and Netflix (NASDAQ:NFLX) were among the worst S&P 500 performers of the session.